Posted: Fri 10th Mar 2023
A group of MPs has called on the chancellor to use the Budget on 15 March to announce whether tax reliefs designed to stimulate investment in small businesses will be extended.
The enterprise investment scheme (EIS) and venture capital trusts (VCT) provide relief for income and capital gains tax. They are both due to expire in April 2025.
As part of its inquiry into the venture capital market, the Treasury Committee said it has "received evidence that the schemes are critical to maintaining investment in early-stage companies", but "the lack of certainty around their renewal could damage confidence in investing in the UK’s small businesses".
The MPs called on Jeremy Hunt to provide clarity on extending the schemes in the Budget announcement on 15 March.
The committee has also published a letter from the chancellor saying he has a "firm intention" to extend the schemes, and evidence from the Association of Investment Companies stating that the Windsor Framework agreement on the Northern Ireland Protocol removes a potential obstacle to the extension.
Harriett Baldwin MP, chair of the Treasury Committee, said:
"As a committee, we've received a significant volume of evidence on the importance of these reliefs to allow businesses to grow, and for firms to plan for the future.
"The chancellor needs to provide clarity and certainty on the future of these pro-growth schemes in next week's Budget."
The committee's call follows a report by All-Party Parliamentary Group for Entrepreneurship and an open letter signed by more than 300 entrepreneurs saying that the schemes should be extended.
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