Baker Tilly warns on EIS and VCT tax changes

Businesses must take extra care when raising money from VCTs and EIS, Chilton Taylor, Baker Tilly’s head of capital markets, has warned.

In last month’s Budget, the chancellor announced changes to the EIS and VCTs legislation to ensure that they complied with new EU state aid rules.

Draft legislation has now been published, and the changes to be introduced include an age restriction on companies, meaning they must be no more than 12 years old from date of first commercial sale to qualify for EIS or VCT investment.

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However, this proposed period conflicts with an existing EU state aid general block exemption limiting the age to seven years, and is therefore subject to further negotiation with the EC.

Mr Taylor said: “The news that legislative changes may be retrospective could come as a shock”.