Exclusive: ‘Government must give clarity on Venture Capital Trusts’ or risk jeopardising start-up growth, says industry chief
The government risks jeopardising funding for early-stage UK startups if it fails to provide clarity on the future of the venture capital trust (VCT) regime, an industry chief has warned today.
Will Fraser-Allen, the new chair of the Venture Capital Trust Association said that ensuring the long-term survival of VCT schemes – which offer generous tax breaks for retail investors – are key to ensuring the UK’s funding landscape can keep pace with global rivals.
“We haven’t got the same scale of venture venture capital that we’re able to compete with the U.S. in terms of those much larger funding requirements,” he told Morning Wire.
“But at the early stage I would argue we’ve got a good set of interventions that allows these companies to come through. There’s over 1000 businesses currently enjoying the support of VCTs to help them grow.”
A ‘sunset clause’ for the VCT regime has been embedded in the legislation which will shut out the relief to investments made on or after 6 April 2025.
But Fraser-Allen said that ensuring the schemes continue beyond 2025 will be top of his agenda as he assumes the role of chair of the association.
“Uncertainty is not good for anybody,” he added. “And that’s why we’re keen to continue dialogue with the Treasury, and why the government has to give clarity around it.”
Fraser-Allen, who is also managing partner of Albion Capital Group and sits on the Venture Capital Committee of the British Venture Capital Association (BVCA), brings over 20 years of experience in venture capital to the role.