The Association of Investment Companies (AIC) has welcomed the removal of the GBP1million limit on investment by a VCT in a single company, which comes into effect from April 2012, and the proposed rules to increase the range of companies eligible for VCT investment.
Ian Sayers (pictured), Director General of the AIC, says: “We are delighted that the Chancellor recognises the role that VCTs have to play in delivering increased economic growth and employment. The proposed rule changes allow VCTs to invest in a wider range of companies which is a welcome boost to the sector and businesses desperately seeking finance.
“The Chancellor’s removal of the GBP1million limit on VCT investment in a single company will ensure more efficient support to smaller businesses in the UK. Due to the withdrawal of banks from small business lending, there is an increase in the range of companies which are unable to secure development capital from traditional sources. VCTs are able to help address this issue, stimulating enterprise.”
The proposed rule changes, subject to State Aid approval, increase the range of companies eligible for VCT investment. This includes SMEs with:
assets of up to GBP15 million before investment (up from the current ceiling of GBP7 million), up to 250 employees (up from the current limit of 50), and, the annual investment limit for qualifying companies will increase to GBP5 million.
