VCT managers sceptical of Govt plans ahead of Budget

Venture capital managers and investors are sceptical about the Government’s plans for VCTs and EIS/SEIS ahead of this week’s Budget.

Only 15 per cent think it will have a positive effect on their, or their client’s, business, investment consultancy MJ Hudson Allenbridge reveals.

It surveyed over 120 venture managers and investors on their thoughts regarding tax advantageous schemes ahead of tomorrow’s Budget.

Chancellor Philip Hammond is set to detail how the Government will move forward with improving the “scale-up capital gap” detailed in the patient capital consultation documentFinancing Growth in Innovative Firms, which was released in August.

EIS and VCTs came under scrutiny in the Government’s patient capital review as a potential area for radical reform. Star fund manager Neil Woodford has been a big proponent of the review and sits on its industry panel.

But 64 per cent of respondents said that they would not have invested in one or more of their holdings without the tax advantages of EIS/SEIS, while 60 per cent stated that the VCT regime had aided the development of the companies they or their clients have invested in.

Survey respondents also expressed a large concern over the ramifications of Brexit, with particular emphasis placed on a lack of access to talent, capital and markets.

MJ Hudson Allenbridge partner for venture capital Karma Samdup says: “This survey offers an endorsement and a warning: an endorsement of the Government’s view that the scale-up capital gap needs to be tackled, but also a warning that the reforms should work with the grain of the current system and not against it.”