VCT and EIS sector to grow
Venture capital trusts (VCTs) and enterprise investment schemes (EIS) are among the last government-backed tax efficient investment vehicles. Some will come under pressure in the new year as the government clamps down on those it does not feel are doing their job of providing to small business and serving only as a tax break for wealth investors.
However, despite frequent suggestions the Treasury would impose more widespread restrictions on the sector, there has been nothing but enthusiasm form the government in supporting VCTs and EISs as a way to convert wealth into funding at a time when small businesses cannot rely on lending from the banks. Next year will see the introduction of a seed investment EIS for business start-ups, and the removal of the £1 million investment limit on VCTs will also boost growth of the sector. Association of Investment Companies director general Ian Sayers (pictured) has argued the latter could ‘transform’ the VCT sector.