Over the last 20 years, the government has introduced various tax incentive schemes designed to encourage investment in early stage, and therefore higher risk, companies. These schemes include the Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs). As generous as these schemes are, rules surrounding them are extremely complex.
To assist with this complexity, in the Autumn Statement the Chancellor announced a clarification to the rules regarding share conversion rights, the introduction of greater flexibility in relation to follow on investments made by VCTs and the launch of a consultation which will be carried out into options to streamline and prioritise the advance assurance service.
All of this will be welcome news to the startup business community which relies so heavily on the investment these schemes encourage.