Tax crackdown on start ups

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 Tax crackdown could hit start-ups for £400m

A crackdown on the abuse of a tax break designed to encourage high earners to invest in risky companies could deprive start-ups of as much as £400m next year. The Treasury is tightening rules surrounding the Enterprise Investment Scheme (EIS), which offers tax relief of 30%. From April, the sweetener will be worth up to £600,000 a year for investors in “knowledge-intensive” companies. The new eligibility rules are intended to prevent investors using the scheme as a means of capital preservation by backing low-risk companies. The EIS Association says investment funds could pull as much as £400m out in the first year in response to the changes, although it expects investment to bounce back after that.

Source: The Sunday Times (18/02/2018)

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