A leading business group has called on the government to simplify existing tax relief schemes in order to boost entrepreneurship.
In a new report out this week, the Institute of Directors (IoD) has argued that the full potential of the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) is “not fully being realised”.
“EIS and SEIS can open up the equity economy and help more people take a stake in the start-up revolution taking place around the country,” said IoD deputy director of policy Jimmy McLoughlin.
He added: “Too few businesses, however, are aware of these schemes, and not enough investors feel confident enough to get involved.”
The IoD said £1.6bn was invested in up to 24,000 firms through the investment tax relief schemes in 2013/2014. But 95 per cent of the funds came from large investors, and a disproportionate amount (69 per cent of investment) was supporting businesses the South East.
The IoD is pushing for EIS and SEIS investments to be included in a super-ISA, as well as for the introduction of an online system for claiming tax relief on investments of less than £2,000. They also want to set up a so-called “aggregator fund” to allow smaller investors to participate.