The Autumn statement once again showed the government’s support for the main UK approved tax schemes. These schemes have become well established policies to support the flow of capital to growing businesses in the UK. It would seem these schemes have cross party support given their contribution to the growing economy.
The main change was in renewable energy, with AD and Hydro disqualified from EIS and VCT relief. Following the announcement in the last budget regarding the other renewable projects (eg solar) no longer qualifying it was only a matter of time before AD an Hydro joined them. It is not entirely clear why they were not included in the first place. We have long argued that renewable energy had an unbalancing impact on the EIS market and this announcement is a welcome one.
The other big announcement was around the social investment tax relief (SITR) and the increasing of the limits to bring it in line with EIS (eg £5m investment limit). In addition community renewable projects will continue to qualify for the tax reliefs. Unlike EIS, SITR is available on debt which could potentially make it an attractive product if structured correctly, although the changes to SITR require EU approval which might take some time.
The final meaningful announcement was regarding a new online digital process for obtaining the tax relief. Anyone who has had to deal with mountains of EIS3 certificates will welcome this news, but given it is a government IT project with usual procurement, implementation etc issues we are not holding our breath…