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Small Business News
State aid approval for the UK for three tax-based Venture Capital Schemes
The three tax-based Venture Capital Schemes in the UK, the Enterprise Investment Scheme (EIS), Venture Capital Trusts (VCTs) and the Corporate Venturing Scheme (CVS)), have each received formal state aid approval from the European Commission. This allows the Government to provide certainty to the venture capital industry, investors and small companies over the future of the schemes.
These schemes remain a vital component of the Government's strategy to support investment. The schemes have so far facilitated around £10 billion of investment, which has been invested in over 15,000 companies.
The schemes were notified to the European Commission as state aids in 2007. The Government is legally obliged to demonstrate that the rules governing the schemes comply with the appropriate guidelines and treaties.
A final set of four changes is required to secure approval. Of these, the most significant is a relaxation of the rules relating to the location of small companies' qualifying activity. The relaxation allows companies to receive investment under the schemes while enjoying greater opportunities to expand internationally.
Legislation implementing these changes will be introduced in Finance Bill 2010, to provide time for consultation with industry over the detail. Overall, the Government believes that the changes will increase use of the schemes, providing greater investment finance to small companies seeking to grow.
The Exchequer Secretary, Angela Eagle MP, said: "This is excellent news for the venture capital industry, particularly at this challenging time. State aid approval of the three venture capital schemes allows the Government to provide certainty over the future of the schemes. The Government is confident that they will continue to encourage substantial investment into small companies which is vital to our economic recovery.
by: Editor
29th Apr 2009
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