The Venture Capital Trust Association (VCTA) is the industry body representing twelve of the largest venture capital trust managers in the UK. Its members make up more than 90% of the VCT industry, with £5.5bn funds under management invested through an extensive regional network of local offices across the UK.
It is an industry body actively campaigning to support early-stage businesses during a period of significant economic disruption and create the regulatory landscape to unlock sufficient growth capital to accelerate the UK’s recovery. We are grateful to the VCTA for providing the following technical information about the nature of VCTs and the significant benefits they bring to the UK economy,
Effectiveness of VCTs
VCTs are able to provide evergreen patient capital. Because they are evergreen funds, the initial 30% income tax relief not only leverages the additional 70% of private capital, but this sum can grow and be re-invested multiple times by the fund into new eligible businesses across the UK.
VCTA data comprising more than 90% of the VCT industry by value shows that investments made by VCTA members delivered the following boosts to the UK economy:
Scale
- Over the last financial year, VCTA-backed businesses delivered £12.5 billion in revenues, generating £3 billion in exports and investing £548m in R&D. 76% of post 2015 VCT investee companies have invested in R&D.
- Over 1,000 companies across the United Kingdom currently benefit from VCT funding.
- Since 2018, VCTA members have made investments totalling over £1.64 billion, of which £668.6m was invested in the last financial year.
Delivering Growth
- Over the past three years, unquoted VCTA companies have increased sales by 62.5%. Exits from successful VCTA-backed businesses have valued those businesses at £7.6 billion in 2021.
- Since 2018, VCTA-backed businesses have on average increased export sales by 275% to £1.1m in 2021.
- Looking at the cohort of companies in the VCTA portfolio who have been present from 2018-2021, sales have grown from £548m to £783m over 3 years: a 42.8% growth despite the pandemic. Average sales have increased from £5.5m per company to £7.8m (a 42% increase).
High-value jobs
- The 1,119 companies currently supported by VCTA members employ 50,844 people, predominantly across the UK.
- The average salary of unquoted VCT companies was £47,975 in 2021 – significantly higher than the UK average salary of £38,131 for full-time employees and reflecting higher productivity levels
- VCT companies provide significant sums to HMRC. In 2021, £492m of PAYE, NI and social security payments were paid to HMRC by VCTA companies.
Source: VCTA via IFA/GBI Magazine’s Tax Efficient Investment Research Report 2025, Page 145
