Nineteenth Report - Venture Capital

The government rejects making the provision of diversity statistics a requirement for eligibility to receive EIS, SEIS, and VCT tax reliefs, citing legal complexity and administrative burdens for small, young businesses. It notes HMRC is reviewing ways to obtain additional demographic data and the Integrated Data Service may offer a future source of information.

The government rejects making compliance with the Women in Finance Charter and Investing in Women Code a 'comply or explain' condition for EIS, SEIS, and VCT eligibility. It argues this approach would not achieve desired results and would place an undue burden on early-stage companies, though it notes the British Business Bank already applies such an approach for its own investments.

The government rejects extending the 7 and 10-year company age limits for EIS and VCT schemes, arguing it would risk displacing investment from smaller companies and is not an appropriate way to address regional imbalances, despite agreeing that regional businesses should not be disadvantaged.

The government acknowledges the importance of supporting scale-up businesses and highlights existing support through the British Business Bank and British Patient Capital. However, it rejects consulting on higher funding limits for EIS and VCT schemes, arguing that such revisions would risk undermining policy rationale, displacing investment, and reducing value for money.