Commenting on the latest ONS Enterprise Investment Scheme/Seed Enterprise Investment Scheme tax relief statistics, Luke Barnett, head of tax advantaged strategies at St. James’s Place, said:
“The latest statistics released for EIS/SEIS highlight the growing popularity and importance of these schemes. Pent up demand as the economic activity normalised following COVID restrictions, and strong performance across the venture space helped to shore up interest, and is likely reflected in the numbers.
“Investments into early-stage start-ups are crucial to the growth of our economy, driving significant research and development, building intellectual property and importantly creating skilled jobs. The availability of these schemes also helps to entrench the UK as a player within the start-up space and therefore helps to attract key talent from abroad.
“From a retail investors perspective, not only are these schemes a valuable tool for financial planning, but they also provide investors with the unique opportunity to get exposure to a bustling UK venture capital market. Largely uncorrelated returns to the broader equity markets can provide an important route to diversification.
“However, investments of this nature do bring with them a specific set of risks including loss of capital and illiquidity well beyond the stated minimum holding periods, and so investors should consider carefully if they meet their circumstances. We would also welcome much needed clarity surrounding the EIS and VCT sunset clause, to ensure that this very important industry continues to flourish.“