Enterprise Investment Scheme Association responds to Coronavirus crisis with calls on Government
The Enterprise Investment Scheme Association (EISA) has published its response to the Coronavirus crisis with calls on the Government for action aimed at releasing £200m of private sector funds to back the UKs fast growth businesses.
The Enterprise Investment Scheme provides tax incentives to private investors who use their own funds to invest in early stage fast growth businesses.
To drive up to an additional £200m of private fund investments, the EISA is lobbying Government to increase the tax relief available to investors from the current 30% for EIS (Enterprise Investment Scheme) and 50% for SEIS (Seed Enterprise Investment Scheme) to 60% as a temporary measure until a recovery is underway, at which stage the relief would revert back to the existing levels.
Fund members of the EISA are lobbying similarly and claim that there is an immediate call from growth businesses to their investors to reinvest in them to get them through the current crisis. The liquidity is there, but equally in the current uncertain environment investors are nervous. Extending the tax reliefs would encourage many to make further private sector funds available, which has to be in the interests of both the businesses and the Government.
Director General of the EISA, Mark Brownridge commented, “We believe it is perfectly achievable to implement these recommendations in the short term and that they will facilitate faster and increased deployment of capital to entrepreneurial businesses. We estimate that between £100m to £200m of addition private investment could be achieved right now to support the businesses that represent the future, but without this additional support they may well not achieve their full potential, or at worst may fail. We strongly urge the Government to review our recommendations”
A copy of the full response is available at: https://eisa.org.uk/news_story/desperate-times-call-for-drastic-measures/