The government has extended the Enterprise Investment Scheme (EIS) and the Venture Capital Trust (VCT) scheme by 10 years to 5 April 2035.

The Treasury stated that the extension of the two investment schemes would support start-ups and entrepreneurs to help them “grow the economy and rebuild Britain”.

The schemes seek to encourage investment into new or young companies through tax-relief incentives, aiming to encourage innovation, stimulate economic grown and create jobs.

Over the past 30 years, more than £41bn has been raised through the schemes since the EIS was launched in 1994, with the extension looking to build on this.

Both schemes offer incentives to investors of up to 30 per cent upfront income tax relief and an exemption from capital gains tax on any profits made after the sale of shares.

The extension of the schemes was announced in the House of Commons via a written ministerial statement today (4 September).

Commenting on the announcement, Exchequer Secretary to the Treasury, James Murray, said: “Our entrepreneurs are a driving force for economic growth, creating jobs and boosting investment.

“Championing schemes with proven success is vital in our mission to support the innovators to help rebuild Britain and make every part of the country better off.”

British Private Equity & Venture Capital Association (BVCA) chief executive, Michael Moore, said it was “excellent news” that the government was moving so quickly to extend the schemes.

“The BVCA has long advocated for this move as these schemes play a vital role in supporting early-stage companies that have the highest growth potential and crowding in further investment through the growth cycle," he stated.

“As the third largest VC market in the world, the UK has proven the success of EIS and VCT, and with many jurisdictions now following our lead, it is vital that the UK retains its competitive edge in a competitive world and this move is a very positive step in that direction.”

Association of Investment Committees chief executive, Richard Stone, added: “VCTs invest in the UK’s most exciting early-stage companies. They help entrepreneurs transform their businesses.

“Extending the VCT scheme until 2035 will allow the sector to raise further capital and invest with confidence. This will ensure VCTs can help the government secure its ambitions to grow the economy, support innovation and create jobs.”

---