EISA calls on government to boost SMEs prospects
As the UK exits Europe and looks now to negotiate the environment in which businesses will have the opportunity to grow and prosper, the Enterprise Investment Scheme Association (EISA) is calling on the government to look favourably on the schemes that encourage UK investors to support new businesses.
Director general of the EISA, Mark Brownridge, commented, ‘For 25 years the Enterprise Investment Scheme (EIS) and the Seed Investment Scheme have been helping start, and scale up, businesses who have struggled to gain access to funding. Over that time the schemes have helped over 27,000 SMEs raise over £20bn. As we now look to negotiate what our independent future looks like, we have the opportunity not just to ensure that these schemes continue, but that they are improved to provide even greater support to this vital sector of our economy.’
The EISA have set out four key calls on the government
- By increasing the threshold for EIS and SEIS investment, and potentially removing it all together, will encourage follow-on investments, and could help smooth the transition into non-tax-incentivised investments. Additionally, we need a commitment from the government that the schemes will be ongoing for at least the following seven years to give businesses and investors alike the ability to manage their investment plans effectively
- There is a compelling case for improving the administrative processes around authorising SEIS and EIS companies and granting tax relief for investors. Too many businesses struggle with the administration, and potentially fall foul of the scheme rules. A simplification both of the rules and the administration of the schemes would potentially see more businesses and investors using them.
- More can be done to raise the profile of EIS and SEIS both to companies seeking much needed equity finance including involving a far wider range of business support agencies such as LEPs, Universities and the IOD and to potential investors. The EISA stands ready to work with the Government in promoting the value of the schemes and in encouraging more investors and businesses to make use of the opportunities available to them.
Britain should seek via negotiation with the EU to loosen the EU State Aid and Risk Finance Guidelines limits as soon as practically possible to allow both for an increase in the levels of investment as well as liberalising the legislation thereby ending restrictions on investment. This would allow faster deployment of capital and lessen the administrative burden.
‘There will be a lot to cover as the negotiations for our future relationship now progress. Protecting schemes that underpin the availability of capital for new growth businesses is critical, and we will look to work closely with the relevant departments to ensure we achieve the best outcome possible,’ added Mark Brownridge.
