Chancellor George Osborne has made the Seed Enterprise Investment Scheme (SEIS) permanent after a successful two-year trial.
Set up in Budget 2012, SEIS offers an alternative funding source for small start-ups unable to raise funds from banks.
Instead, SEIS targets private backers by providing generous tax breaks.
One, a 50% capital gains exemption on assets sold to raise cash for a SEIS investment had had to be renewed each tax year by the Chancellor, but now he has made the tax relief permanent.
In policy papers released with the Budget Speech, the Treasury has also revealed other changes to SEIS, the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT).
“The government will also explore options for the tax reliefs to apply where individuals make investments as convertible loans, and to better target high-risk investment will change the eligibility criteria of venture capital schemes to avoid subsidising low-risk activities that already benefit from certain government programmes.
Social Investment Tax Relief
“The Chancellor wants to encourage investors to put money into social enterprises. The government will set a rate of 30% income tax relief – the same as the rate for EIS and VCTs for Social Investment Tax Relief. This rate will allow eligible social enterprises to receive a maximum of around £290,000 investment over three years.”
Also in Budget 2014, Osborne pledged cash to help cutting edge technology breakthroughs.
New centres for training specialists in cell therapy and graphene applications will be established.
Graphene is hailed by scientists as a new wonder material that will revolutionise technology as a conductor and membrane. It’s based on a compound derived from graphite.
Andre Geim and Konstantin Novoselov, of Manchester University, won a Nobel Prize in physics for their work with the material.
Big data development
Osborne also promised to open an Alan Turing Institute to lead the world in developing big data and algorithm software applications.
“Alan Turing, the code breaker who lived in my constituency, who did more than almost any other single person to win the war, and who was persecuted for his sexuality by the country he helped save,” said Osborne.
“I am delighted that he has finally received a posthumous Royal Pardon.
“Now, in his honour, we will found the Alan Turing Institute to ensure Britain leads the way again in the use of big data and algorithm research. I am determined that our country is going to out-compete, out-smart and out-do the rest of the world.”
