Early-stage funding gets a boost in the UK

In yesterday’s budget speech by Gordon Brown, he announced:

” Venture capital is the seed-bed of future enterprise and so for the next two years, Venture Capital Trusts will secure tax relief for investments of up to £200,000 a year not at the lower rate of 20p but at the higher rate of 40p. From 1 April, firms with turnovers under £58,000 will not have to register for VAT —- the most generous VAT threshold in Europe. And also from 1st April an additional 13,000 businesses will be eligible to benefit from simplified VAT accounting. And from next year in 2000 enterprise areas we will further increase the tax incentives to invest. ”

A 50% rise in the tax relief is very good news on the heels of increased investing in early-stage companies. This could really serve to jump-start innovation in the UK. I wonder where the hidden costs are though…

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