The chancellor is being urged to offer more tax incentives for investors that back small and growing businesses when he delivers his budget next month.
Hotbed, the private investor syndicator company, is calling for tax relief from Enterprise Investment Schemes (EIS) to be doubled.
EIS means that investors can get relief on their income tax by up to 20% of their investments. However, in order to encourage more investment in small companies Hotbed wants this figure to be doubled to 40%.
Hotbed says that because EIS investments are higher risk tax incentives should be offered to investors to encourage them to invest.
“The lack of availability of credit for small companies has meant that many profitable, growing companies with robust business plans are having to put their expansion plans on hold and this must be addressed in the Budget,” said Gary Robins, chief executive of Hotbed.
“Suggestions that the rate of tax relief available for investors in small companies through EIS may be doubled to 40% would go a long way towards solving this problem.
“Any loss to the Treasury would be mitigated by ensuring that at least some companies continue to grow through the recession.”
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