Today’s Budget contained no major announcements regarding EIS / SEIS or other tax advantaged venture capital schemes but an update on various measures was provided this afternoon by H.M Treasury and can be found here.
As announced at Autumn Statement, all remaining energy generation activities (including the export of electricity and the production of gas or other fuel) will be excluded from the EIS, SEIS and VCTs schemes for investments made on or after 6 April 2016.
The Finance Bill will clarify certain provisions to ensure the rules introduced by Schedules 5 and 6 to the Finance (No.2) Act 2015 work as intended.
The method for determining the five year period which is used to determine the average turnover amount for condition B of the permitted maximum age requirement, and the relevant three preceding years for determining whether a company meets an operating costs condition to be a knowledge-intensive company, is being amended. The changes ensure that where a company’s most recent accounts filing period started no more than 12 months before the date of the relevant investment being made, the end of the five or three year period is the end of the accounting period falling immediately before the accounts filing period. The change will apply retrospectively with effect from 18 November 2015 but companies will be able to make an election to apply the existing method for investments made before 6 April 2016.
For VCTs only, the rules will clarify the non-qualifying investments permitted for liquidity management purposes.
Finance Bill 2016 introduces legislation permitting HMRC to collect information from businesses that receive state aid through the tax system, and to share and publish that information. This follows new European Commission reporting requirements. The requirements are set out in Article 9 of Commission Regulation 651/2014 (General Block Exemption Regulation (GBER)). The new rules apply to all aid notified under either GBER or certain other State aid guidelines and take effect for state aid provided from 1 July 2016
The EIS and VCTs are State aids falling within the EU reporting requirements and details of companies receiving total EIS/VCT investments above 500,000 euros will be published in due course. Details of individual EIS investors will not be published. We will be providing further guidance and contacting VCTs shortly.
Further information can be found here: http://europa.eu/rapid/press-release_IP-14-588_en.htmhttp://ec.europa.eu/competition/publications/cpb/2014/004_en.pdf