Britain’s early-stage businesses breathed a sigh of relief today after the government announced it would extend two of its flagship tax-advantaged investment schemes.
The Venture Capital Trust (VCT) scheme and the Enterprise Investment Scheme (EIS) were implemented to encourage investment in young companies through tax breaks.
The policies were put through with a sunset clause that would have seen them expire in April 2025.
The previous government said in its last Autumn Statement that it would legislate to extend these schemes. But following the July general election, the fate of the schemes was thrown into question.
The Treasury confirmed on Wednesday both schemes would be extended through to April 2035.
“Our entrepreneurs are a driving force for economic growth, creating jobs and boosting investment,” said Exchequer Secretary to the Treasury James Murray.
“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.”
The decision follows lobbying efforts from the tech industry, including from the Startup Coalition, which has long praised the economic benefits of directing cash towards young startups through tax benefits.
“So much of the growth of startups across the UK over the past decade has been down to these schemes,” said Dom Hallas, executive director of the Startup Coalition.
“Now the uncertainty around their future is over and we’ve finally got them extended they’ll be doing the same for the decade to come.”
