The letter, backed by the Centre for Entrepreneurs, the UK Business Angels Association, venture capital group BVCA and “scale-up” supporter and investor Sherry Coutu, also stresses the need to keep or improve the current Enterprise Investment Scheme (EIS).
Under the scheme, introduced in 1994, investors can cut their income tax by 30%. This is the reward for accepting the risk of putting money — up to £1m a year — into small companies. Businesses can receive up to £5m through the system. According to the Business Angels Association, the EIS and SEIS — its equivalent for young businesses — convinced 90% of angel investors to pump cash into small firms last year.
“There are only two truly significant tax measures that help those who scale up a business: EIS and entrepreneurs’ relief. Anything other than improvements to what we have already would be madness,” said Duncan Cheatle, who founded Prelude and the Supper Club. The group has 350 members who represent businesses with turnovers between £1m and £30m and have average revenue growth of 34%.
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