Tax

UK Tax Authority Says Investment Scheme Limit is Negotiable with EU

Nick Parmee 15 May 2008

UK Tax Authority Says Investment Scheme Limit is Negotiable with EU

UK's HM Revenue and Customs has revealed that the annual investment limit of £2 million (around $4 million) for companies receiving funds under the Enterprise Investment Scheme and other tax-based venture capital schemes is not set in stone. At a seminar held by the Enterprise Investment Scheme Association, David Halliday of HMRC, when asked if the UK government was lobbying the European Union to have the state aid limit raised above £2 million, surprised the audience by saying he thought the limit could be re-negotiated. He added that provided proposals were backed up by solid evidence, they could be able to argue the case in Brussels. Emma Ward of the Department for Business Enterprise and Regulatory Reform (formerly the Department of Trade and Industry) announced that BERR would shortly be launching a research survey into the UK equity gap. This should provide powerful ammunition for the HMRC’s application to the EU to have the investment limit increased. The EIS Association will collate comments and suggestions from its members on the forthcoming consultation paper before meeting with HMRC on 6 June 2008. The consultation period closes on 20 June 2008. Commenting, the chairman of the EIS Association Howard Flight said: “I urge all our members and others involved with EIS schemes to respond to the consultation document and if we can back up our proposals with solid evidence, as highlighted by Mr Halliday, then we have a good chance of influencing the final result."

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