Written by Andrew Aldridge, Partner at Deepbridge Capital
Congratulations on becoming Prime Minister… if you’re like me, you’ll be unpacking those moving boxes for weeks, but I’m sure you wisely made sure the kettle and bottle opener were close at hand!
With a war in Europe, energy prices continuing to soar, Covid still dragging on and the NHS in turmoil, I’m sure you have an inbox full of items marked ‘urgent’. However, as Conservative leader, I am sure you also want to send a message to the business community and to our world-leading financial services sector.
So I have a ‘quick win’ suggestion for you that will show your desire to support innovation in the UK, while enabling UK investors to support the high growth opportunities of tomorrow. The answer is extremely simple and will give you the time and focus to tackle the daunting challenges you face elsewhere. Surely such a quick win is appealing so you can make your mark with minimum fuss and maximum impact?
The UK is a world leader as a home of innovation, technology and life sciences. A world-class university and an entrepreneurial appetite have created highly skilled jobs and innovations with the support of a strong funding ecosystem. We have a strong funding community in the UK, but the Enterprise Investment Scheme (EIS) has arguably never been more critical. EIS is internationally recognized as one of the most effective tax relief schemes; offering investors an unparalleled combination of generous tax relief, including income tax relief, capital gains tax deferral, CGT-free growth, IHT exemption and tax relief. stock losses.
So, Prime Minister, what’s your opportunity for a unique “quick win” in Office? Simply remove the 2025 sunset clause, which was historically agreed with the EU when seeking state aid approval for EIS. With “Brexit over”, as I paraphrase your predecessor, this clause is no longer necessary and is only a hindrance to the confidence of investors and entrepreneurs. So a quick change could cement your reputation as a PM supporting business, entrepreneurship and financial services.
Your Treasury team and a number of your MPs have liaised with figures such as the Enterprise Investment Scheme Association (EISA), the UK Business Angels Association (UKBAA) and the British Private Equity & Venture Capital Association (BVCA) , to present objectively the impact of HIA in terms of job creation, technological and life science advancement and HMRC revenue. All the research we’ve seen to date, including our own at Deepbridge Capital, clearly shows a significant positive impact across the board. As we focus on technology start-ups and life sciences, this has a particular impact, but it does not concern us!
Another potentially easy win would be to increase the SEIS (Seed EIS) limits from the current maximum SEIS increase of £150,000 per company and limit of £100,000 per investor. Maybe £300,000 for each company and £200,000 per investor would be a noticeable improvement, but that’s just thinking for another day.
At Deepbridge, we will continue to support great start-ups in the technology and life sciences sectors, providing private investors with access to these opportunities no matter what, but it would be great to continue as part of of the world’s leading corporate investment program.
Anyway, good luck in the new role and new home – have you ever wondered if it’s a good idea to change the color of the front door, I think teal is currently in fashion ?