NextFin launches campaign to protect UK startups through private investment
Nextfin has today launched its 'Free Our Startups campaign in a renewed bid to help entrepreneurs and startups impacted by coronavirus.
In an open letter to HM Treasury, the financial aggregator calls for significant short term changes to the EIS and SEIS, which use tax reliefs as a means to incentivise private investors who are willing to invest in early-stage businesses, to give startups the freedom to seek their own equity-based investment, rather than accumulate further debt as a result of government business loan schemes. It calls for a temporary rise in income tax relief to 50% for EIS and 70% for SEIS, and also increase the SEIS investment threshold to £250,000 and £10 million for EIS.
As many startups still struggle to access government backed loan schemes such as the Coronavirus Business Interruption Loan and Bounce Back Loan, Nextfin has created a petition and is demanding the government invoke the European Union’s General Blockage Exemption Rule (GBER), a mechanism which can be used to provide lawful State Aid without going through the normal notification and approval processes.
Since its introduction, every Chancellor improved and/or widened the schemes prior to the 2015 changes, recognising its value to the UK economy including the Conservative manifesto which quoted “Some of our work has been spectacularly successful - such as the SEIS & EIS, which we will continue in the next parliament.”
By providing the UK’s most innovative and progressive start-ups with access to long-term capital, EIS and SEIS schemes are hugely beneficial to the UK economy as they create jobs and support the growth of businesses to launch new services and products, and ultimately result in higher tax yields for the government.
Private/public partnerships have been a cornerstone of growth in the most economically developed countries and in the current crisis, can be a cornerstone to jumpstarting the UK economy.
According to HMRC’s SEIS and EIS Statistics Report published in 2019, over 33,000 investors claimed EIS tax relief on 7000 companies in 2017-2018.
Nextfin believes these 33,000 investors can be used to deliver economic stimulus to all eligible SMEs throughout the UK. SMEs are hiring, providing employment opportunities for current workers in the UK and for future workers in the innovation economy.
More information can be found in our open letter: https://nextfin.uk/freeourstartups#openletter
Supporters can sign our petition: https://nextfin.uk/freeourstartups#petition
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Editor’s note
Nextfin is leading the revolution of alternative finance by aggregating equity and P2P investment data to provide factual analysis, real-time data and ratings which help investors to make informed decisions about their prospective investment. As the first FCA-regulated platform to do so, Nextfin has tracked and researched £7.8 billion of P2P funding and 4,679 equity crowdfunding pitches, enabling investors make more of their money and entrepreneurs raise finance.
If you would like further information please get in-touch with Nextfin’s Press Officer Oliver Murphy on press@nextfin.co.uk or 07874121444.
Nextfin website: https://nextfin.uk