AIC responds to Treasury Committee report on venture capital
Call for urgent action on VCTs’ sunset clause.
The Association of Investment Companies (AIC) has welcomed today’s Treasury Committee report on venture capital. The report calls for urgent action on the ‘sunset clause’ affecting venture capital trusts (VCTs), which will cause their tax reliefs to expire in April 2025 unless amended.
The report states: “The EIS and VCTs have statutory sunset clauses that will cause them to expire in April 2025. The Government has signalled an intention to extend the schemes but has not said when it will do so or for how long. This uncertainty is a risk to investment. We call on HM Treasury to detail and implement an extension urgently.”
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “We warmly welcome the Treasury Committee’s support for urgent action on the VCT sunset clause. We hope the Chancellor will take the first opportunity to restore certainty to the UK’s venture capital market by setting out clear plans to amend or abolish the clause in the upcoming Autumn Statement.
“The report finds that the VCT scheme is crucial to funding small, high-potential businesses in the UK. However, it also highlights the potential for the scheme to do more in some respects, for example by spreading investment more evenly across the UK’s regions. It sets out sensible suggestions for achieving this, including revisiting the age limit on eligible VCT investments.
“It’s also clear that more needs to be done to ensure recipients of VCT funding are representative of the UK’s diverse population. It has been encouraging to see more female-led and ethnically diverse teams receiving funding to grow their businesses, but there is widespread acknowledgement that further work in this area is needed for the schemes to reach their full potential.”
“We warmly welcome the Treasury Committee’s support for urgent action on the VCT sunset clause. We hope the Chancellor will take the first opportunity to restore certainty to the UK’s venture capital market by setting out clear plans to amend or abolish the clause in the upcoming Autumn Statement.”
Richard Stone, Chief Executive of the Association of Investment Companies (AIC)
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Notes to editors
- The Association of Investment Companies (AIC) represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s vision is for closed-ended investment companies to be considered by every investor. The AIC has 350 members and the industry has total assets of approximately £265 billion.
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