The UK government has extended the Enterprise Investment Scheme and Venture Capital Trust scheme by ten years, ensuring support for start-ups and early-stage businesses until April 2035.
This extension is poised to drive economic growth by fostering innovation and encouraging investment in new companies across the country.
Government’s Commitment to Growth
The UK government’s decision to extend these schemes underscores its commitment to rebuilding the economy and supporting entrepreneurship.
Announced through a Written Ministerial Statement, the extension of the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes will provide much-needed confidence for investors, ensuring the continued flow of capital into high-risk, early-stage businesses.
As Exchequer Secretary to the Treasury, James Murray, stated,
“Our entrepreneurs are a driving force for economic growth, creating jobs and boosting investment. Championing schemes with proven success is vital in our mission to support the innovators to help rebuild Britain and make every part of the country better off.”
Impact on Start-Ups and Investors
The EIS, introduced in 1994, has been a cornerstone of the UK’s strategy to stimulate investment in innovative companies. By offering tax reliefs to investors, including up to 30% upfront income tax relief and an exemption from capital gains tax, the scheme encourages individuals to back new or young companies.
With the extension, investors can continue to invest up to £1 million annually—or £2 million for shares in knowledge-intensive companies—confident that they are contributing to the next generation of British businesses.
Similarly, the VCT scheme, launched in 1995, plays a critical role in supporting early-stage trading companies by allowing individuals to invest up to £200,000 per year in new VCT shares, with dividends received being tax-free.
This scheme has raised significant funds over the years, with £2.9 billion generated in 2022-23 alone, demonstrating its effectiveness in fueling business growth.
Long-Term Economic Benefits
Extending these schemes is more than just a boost for investors—it’s a strategic move that aims to solidify the UK’s position as a global leader in innovation and entrepreneurship.
By providing a secure environment for investment, the government is not only encouraging the growth of small businesses but also ensuring that the UK remains competitive on the world stage.
Michael Moore, Chief Executive of the British Private Equity & Venture Capital Association, praised the move, stating,
“It is excellent news that the government is moving so quickly. This means that investors can now focus on what they do best, investing, safe in the knowledge that these schemes now have the long-term security needed to drive investor confidence.”
Driving Innovation and Job Creation
The government’s focus on extending these schemes is a clear indication of its broader strategy to drive innovation and create jobs. With the EIS and VCT schemes now secure until 2035, thousands of entrepreneurs and start-ups will benefit from continued access to the capital they need to grow and succeed.
Richard Stone, Chief Executive of the Association of Investment Companies, emphasized the importance of this extension, saying,
“Extending the VCT scheme until 2035 will allow the sector to raise further capital and invest with confidence. This will ensure VCTs can help the government secure its ambitions to grow the economy, support innovation and create jobs.”
Sustainability and Future Prospects
Looking ahead, the extension of the EIS and VCT schemes is expected to contribute significantly to the UK’s economic recovery and long-term growth. By supporting early-stage businesses, the government is laying the groundwork for a more resilient, innovative, and competitive economy.
EIS and VCT Scheme Highlights | Details |
|---|---|
| Initial Launch | EIS (1994), VCT (1995) |
| Extended Until | April 2035 |
| Annual Investment Limit | EIS: £1 million (£2 million for knowledge-intensive companies), VCT: £200,000 |
| Tax Benefits | Up to 30% income tax relief, capital gains tax exemption, tax-free dividends for VCTs |
With the continued success of these schemes, the UK is well-positioned to remain at the forefront of global innovation, ensuring that entrepreneurs and investors alike have the support they need to thrive.
资料来源: THX新闻, HM Treasury & James Murray MP.
