Andrew Aldridge, Head of Marketing at Deepbridge Capital, the tax-efficient investment manager, on the announcement by the Chancellor, Philip Hammond, regarding the Government’s response to its ‘Financing growth in innovative firms’ consultation and the new measures specific to EIS/SEIS:
“As anticipated the consultation response to ‘Financing growth in innovative firms’ is seeking to return EIS/SEIS investments back to how they were originally envisaged, and the new principles-based ‘risk to capital’ test is designed to ensure that the propositions only invest in those businesses which are deemed to be ‘knowledge intensive’, have the capacity to grow quickly and are not simply low-risk tax shelters.
“We are fully supportive of this and while it will be interesting to see how this new test works in practise, and what types of business are excluded from EIS/SEIS as a result, our own focus on investing in companies active in both the technology and life sciences sectors would appear to fit neatly into this repositioning. Clearly, for those businesses that do qualify – and investors willing to invest in them – there are some major positives from the new measures including a doubling of the investment limits for EIS.
“To our mind, EIS/SEIS investment is all about supporting highly innovative firms who have the potential for rapid growth, in some of the most exciting business sectors in the UK. Our propositions will continue to do just that and we feel today’s announcement by the Chancellor confirms the future for these products and clarifies that the direction Deepbridge has taken, and the firms we continue to support, are the right ones. We are pleased that the Chancellor’s clear definition of ‘the spirit of EIS’ matches our own.”