EIS Association backs industry call for changes to the Government’s Future Fund terms
The Enterprise Investment Scheme Association (EISA), the industry body responsible for representing funds and businesses involved in the promoting EIS benefits to investors supporting fast growth businesses through tax based investments, is reinforcing the comments made by Coadec (Coalition for a Digital Economy) in lobbying the government to change the terms of the recently announced Future Fund.
The Future Fund was launched by the Government to support early stage businesses looking to attract private investors by providing a matching investment, alongside private investors, through the scheme. Whilst on the face of it this initially looks attractive, the terms of the scheme mean that the tax benefits available through the EIS Scheme would not be available to matching private investor element. For many investors this makes the availability of the Future Fund highly unattractive.
Commenting on behalf of the EISA, Director General, Mark Brownridge said, “We very much support the Government’s initiative in looking to provide a matched investment scheme to run alongside private investors, as we try to access what we believe to be in excess of £200m of investment capacity currently in the hands of private investors, but being held back in the uncertainly that the current crisis has created. However, most of the investors who are potentially likely to invest will want to do so making use of the tax advantages of the EIS scheme. In excluding the ability to do this, the Future Fund runs the risk of having a very limited impact and we are lobbying the Government to review the terms of the fund accordingly.”
In a survey recently carried out by the EISA, 4 out of every 5 fast growth businesses reported that without continued support from private investors their future would be far from secure.