Startup funding schemes, the Enterprise Investment Scheme (EIS) and the Venture Capital Trust (VCT) scheme have been extended by ten years to 5 April 2035.
Government extends two leading investment schemes aimed at startups
Thousands of entrepreneurs and startups are set to benefit from the extension of two leading government investment schemes targeted at helping startup businesses get off the ground and grow.
The Enterprise Investment Scheme (EIS) and the Venture Capital Trust (VCT) scheme were both set to end on 6 April 2025 but will instead run until 5 April 2035.
The schemes are designed to encourage investment into new or young companies through tax-relief incentives, encouraging innovation, creating jobs and stimulating economic growth.
The two startup investment schemes at-a-glance
Both schemes offer incentives to investors of up to 30% upfront income tax relief and an exemption from capital gains tax on any profits made after the sale of shares.
Launched in 1994, the EIS scheme offers investors loss relief as long as shares are held for at least two years.
VCTs, which were then introduced in 1995, are companies listed on the UK stock exchange. They invest in early-stage trading companies on behalf of investors. Dividends received from VCTs are tax-free.
Since the launch of the EIS in 1994 the two schemes have delivered significant impact and success with over ยฃ41 billion raised to date. ย
What’s in it for startups?
This ten-year extension will benefit startups and help provide access to startup funding by providing investors with the confidence to continue to invest into high-risk, early-stage businesses. Early stage investment of this type is a vital element in supporting long-term growth and the development of the economy on both a regional and national scale.
Read more: Boost for UK growth as start-up investment schemes extended – GOV.UK (www.gov.uk)
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