As new initiatives and information come from central government and the various departments like HMRC and the Treasury we will update you on the one’s we see as important to our current clients and potential new clients via the Kaizen Accountancy section of our website. So, keep visiting this part of our website so that you remain updated on any recent news and please get in touch with us if you want any help or more information.
For this article we spoke with Darren Trice, Kaizens CEO, about extensions to Tax breaks on two schemes for start-ups. The Treasury recently confirmed the extension of the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) tax reliefs. The schemes will now run until 5 April 2035 and are designed to encourage investment into new or young companies through tax-relief incentives, encouraging innovation, creating jobs and stimulating economic growth.
Both schemes offer incentives to investors of up to 30% upfront income tax relief and an exemption from capital gains tax (CGT) on any profits made after the sale of any shares.
- The EIS offers tax relief to individuals that invest in new shares in qualifying companies with investors able to invest up to £1m, or £2m if the shares are in knowledge-intensive companies, which focus on research and development (R&D). Shares must be held for at least two years.
- VCTs are companies listed on the UK’s stock exchange that invest in early-stage trading companies on behalf of people, enabling individuals to invest up to £200,000 per year in new VCT shares with dividends paid tax-free.
The extension will provide the confidence to continue investment into high-risk, early-stage businesses in the UK, supporting long-term growth and the development of these companies. So if your business or investment falls into this profile Darren urges you to get in touch so that you and any investors can take advantage of what are very rewarding tax breaks.
“The two schemes raised £2.9bn of funds in 2022-23 and 1,280 companies used EIS for the first time over this period” said Darren “In the UK startups are a driving force for increasing jobs and achieving economic growth. As these are both objectives set for the economy by the new government these tax breaks were always on the political agenda. We now need to make sure that local entrepreneurs and investors are aware of the tax benefits both schemes offer. They give the confidence investors need to continue providing funds for high-risk, early-stage businesses, and in turn support long-term growth plans and the future development of these companies.”
If you need help with EIS or VCT, call us on 01482 772261 or email us. We will be very happy to help you with any query you may have or come and see you for a no cost initial consultation.