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Discussion focused on angel investment sector and improving conditions for new enterprise.
The Prime Minister and Lord Young have chaired a panel discussion at Downing Street with business angels, entrepreneurs and professional advisers, to share views on issues affecting the angel investment sector and to discuss improvements to the conditions for new enterprise in the UK.
The Government wants to make the UK the best place to start, finance and grow a business; and making it easier for smaller and start-up businesses to access finance is one of the Government’s key priorities.
To unlock creativity and entrepreneurial talent in the UK, and encourage more people to invest in new business start ups, the Government has:
- increased the rate of income tax relief for the Enterprise Investment Scheme to 30 percent to encourage more equity investment in start-ups;
- doubled the investor limits to £1 million per year from this April;
- launched the new Seed Enterprise Investment Scheme, which provides 50 per cent rate of income tax relief for individuals who invest in new early stage businesses; and
- from April, for one year only, to kick start the scheme there will be a capital gains tax holiday, so gains can be re-invested into start-ups and be exempted from capital gains tax.
These generous tax breaks will boost investment in small businesses, and help to create strong, sustainable growth in the UK.
Prime Minister David Cameron said:
It will be new business creation that will drive jobs and success for the future. I think this agenda is more important than ever when you look around the world and you see how businesses can go from an idea in someone’s brain, a practical bit of work in someone’s garage to a multi-billion pound business in just a few years. I think that is the exciting potential of what new businesses and business start-ups provide. The people in this room are absolutely essential to Britain’s economic revival and I hope that it’s recognised that the government is trying to do what it can to help Angels and business investment.”
Read the full transcript of Prime Minister’s speech and Q&A.
The Prime Minister also posed an open question about angel investment on LinkedIn. The Prime Minister wrote:
What are the prospects for angel-investing in the current UK economic climate and how can we create more confidence for investors? What should SMEs do to be more successful in attracting investment?
Anthony Clarke, Chair, British Business Angels Association (BBAA) said:
We are delighted that the Government is supporting the further growth and expansion of the angel investing in the UK through two major new initiatives. The new Seed Enterprise Investment Scheme (SEIS) is a very welcome and, some may argue, a bold move by Treasury, to reverse the shortage of supply of seed investment in the UK and will undoubtedly attract essential new Angel money into the seed stage. The new Angel Co Fund will assist in leveraging significant new capital from angel syndicates, providing much needed new equity funding in the UK’s equity gap between £250k and £2m.
The challenge remains on how we can double or even treble the numbers of UK angel investors in order to significantly grow the start up and early stage investment market to provide much needed funding to the UK’s innovative businesses. There is a role for the Government to play here in assisting and encouraging a campaign to increase the awareness of individuals to become angel investors to invest in innovative high growth potential entrepreneurs, with a particular focus on encouraging more women angel investors, given the current ratio of nine men for every one angel investor in the UK”.
Business Angels are playing an increasingly important role as a key source of finance for small businesses and for the skills and expertise they offer entrepreneurs to help them to develop and grow. The Government’s priority is to stimulate an active and supportive market for angel investment.
Published: 10 February 2012