Investment cash raised by UK firms plunges 12% as tax rules change
The number of UK firms applying for investment through the Seed Enterprise Investment Scheme, a Government tax relief designed to encourage investment in small, early-stage companies, is rising at a ‘painfully slow pace’, according to the Institute of Directors.
Meanwhile, Revenue & Customs
Jamie Kerr, head of entrepreneurship and tech policy at the Institute of Directors, said: ‘The number of UK companies applying for permission to receive investment through the SEIS is rising at a painfully slow pace. This relief, alongside its older brother the EIS, has been a welcome addition for
‘The overall low number of applications for SEIS eligibility will prompt questions about whether more can be done to market their benefits to the wider business community.
'It is an example of a policy that the next Government should push much more heavily if it wants to boost entrepreneurship in the UK. The take-up of SEIS and EIS is also still skewed towards London and the South East.’
In 2015-16, 3,285 firms raised £1.65billion via EIS, down from £1.88billion the year before.
Ray Abercromby, a partner at accountancy firm Smith & Williamson, said: ‘We are seeing the changes from the summer Budget 2015 take effect. The alterations
‘Businesses and investors now have to pay very close attention to the structure of their company. The changes have forced individuals, who just want to grow their business, to focus on the structure of their business in case they accidentally fall foul of the rules.’
In July 2014, the Government launched a consultation on tax-advantaged venture capital schemes. It then announced in the summer Budget 2015 that it would introduce a series of changes to place a greater emphasis on supporting innovative firms, while continuing to provide targeted support for growing firms, in line with new state aid rules.
Last week, a Federation of Small
Its report found 21 per cent of small employers have EU staff. Of those, 72 per cent recruited all of their EU workers when they were already living in the UK. And 95 per cent of small firms have no experience using the UK’s points-based immigration system to recruit non-EU workers.
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