The EIS and VCT sunset clause received an 10 year extension from April 2025 to April 2035 in the Autumn Statement.
Jack Rose, head of Retail Sales at Triple Point said the company warmly welcomed the decision, describing it as “testament to the government’s commitment to nurturing the growth of young, fast-growing SMEs, which serve as the backbone of the UK economy.”
Rose added: “The tax incentives embedded in VCT and EIS have proven to be magnets for investors, attracting over £1 billion in VCT investment for the second consecutive year, in the 2022/23 tax year.
“Simultaneously, EIS saw an impressive investment of over £2.5 billion by UK taxpayers during the same period. These figures underscore the vital role these pieces of legislation play in providing crucial resources to young companies and the investors who believe in their potential.”
Over nearly three decades, companies backed with VCT and EIS capital have not only created thousands of jobs across the UK but have also paved the way for several to become unicorn tech success stories, Rose pointed out. “This success speaks to the effectiveness of the model the UK has established for early-stage companies, positioning us at the forefront of early-stage company investment in Europe.
“The extension of the VCT and EIS sunset clause ensures the continuation of a proven framework that fosters innovation, fuels job creation, and facilitates the emergence of groundbreaking technologies.”
Richard Stone, chief executive of the Association of Investment Companies (AIC), added that extending VCTs’ sunset clause “addresses an urgent issue as the sunset clause would have automatically ended VCT tax relief in April 2025. The extension to 2035 will help provide certainty to investors and businesses and enable VCTs to continue supporting UK growth companies.
“VCTs play a vital role in providing funding and support to small, ambitious UK businesses, a key driver of economic growth. The AIC will continue to work with the government as the legislation passes through parliament and we hope this measure will unlock further investment.”
