Budget 2014 reaction: The Seed Enterprise Investment Scheme (SEIS)
Following last year’s two year extension, today’s report revealed the capital gains tax relief will be made permanent
Despite a lack of focus on small businesses in the 2014 Budget report today, one area of good news for start-ups seeking investment was the announcement that the Seed Enterprise Investment Scheme (SEIS) will be made permanent.
The incentive, which allows investors to receive an income tax deduction worth up to 50% of investments, was made permanent to ensure new investors continue to back British businesses.
So were business owners and experts pleased?
John Spencer, UK CEO, Regus
“For start-ups and young firms we welcome the move to make the Seed Enterprise Investment Scheme (SEIS) permanent.”
Caroline Le Jeune, partner, Blick Rothenberg LLP
“It is great news to hear that SEIS tax relief has been made permanent following its successful introduction in 2012/13, however, what aspects will be made permanent remains to be seen.”
Mark Payton, managing director, Mercia Fund Management
“Small to medium enterprises can breathe a sigh of relief as George Osborne backed up his support for them by continuing the coalitions’ tax incentives for private investors seeking investment opportunities via Enterprise Investment Schemes (EIS) and, most importantly Seed EIS (SEIS). In addition, the government has made it clear that such incentives are not provided for low risk investments which already receive government subsidy.
“George Osborne has used this budget to not only endorse small businesses, but has taken the opportunity to give a strong message of support to the next generation of entrepreneurs within the UK by making the Seed Enterprise Investment Scheme permanent.”
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Shalini Khemka, CEO, E2Exchange
“Making SEIS permanent is a positive step but we would still like to see further reforms of the scheme, primarily allowing a broader class of shares to be included under the scheme, widening the variety of sectors from which businesses are eligible and doubling the £150,000 limit that a company can raise under its rules.”
Luke Lang, co-founder, Crowdcube
“First, while it’s great news that the Chancellor is making SEIS tax relief permanent, we’d like to see the £150,000 level (for 50% tax relief) raised to £250,000. Tax incentives such as SEIS and EIS have been hugely important in driving investment in small businesses and we want these to benefit the businesses seeking larger sums of investment for growth.”
Gary Robins, partner, Chancery Investment Partners
“The Chancellor’s support for private investors in start-up businesses by making the 50% CGT relief in the Seed Enterprise Investment Scheme (SEIS) permanent is a welcome move.”
“What investors may not realise is that this relief was originally set at 100% for tax year 2012/13 and investors can still benefit from that 100% relief if they invest in an SEIS qualifying company before April 5th.”