Government's start-up seed funding scheme to fall flat, predicts tax expert
Posted by Natalie Brandweiner in Finances, Regulation on Wed, 07/12/2011 - 13:30
A tax expert has warned that the government’s latest incentive to encourage investment in start-up companies will have little effect.
In draft clauses for the 2012 Finance Bill 2012, the Treasury set out the terms of the Seed Enterprise Investment Scheme (SEIS) which chancellor George Osborne first unveiled in his Autumn Statement.
SEIS, due to come into effect on 6 April 2012, will apply to start-ups companies with 25 or fewer employees holding assets of no more than £200,000.
The new scheme will provide 50% tax relief to investors who invest an annual amount of up to £100,000 and take a stake of up to 30% in a company. Investors will also be eligible for a tax holiday if they reinvest money from the sale of SEIS shares into another business during 2012-13.
But Giles Mooney from TAXtv said: "It is the standard approach of government to try to persuade people that we are trying to encourage investment in businesses, but these are regimes which always are attractive to larger structures.
"The people that need this money are the family plumbing businesses and these ideas just don't seem to encourage that. They are much more focused on those big-little businesses, which is always something that frustrated me."
Addiontally, the government has proposed to simplify and extend the existing Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) in next year's Finance Bill.
- 745 reads
- login or register to post comments
- Add to a social bookmarking site
Dragons' Den judges James Caan and Deborah Meaden and social entrepreneur Karen Darby are some of the successful entrepreneurs who feature in our exclusive videos. 
Join our social media discussion group and share your Twitter username with other BusinessZone members. 
We've got lots of free books to give away; all you've got to do is review them!