A number of tax breaks for startups risk withdrawal if the Government fails to act, warn MPs from the All-Party Parliamentary Group (APPG) on entrepreneurship.
The seed enterprise investment scheme (SEIS), the enterprise investment scheme (EIS) and venture capital trusts (VCTs) could end in April 2025 unless the rules are changed.
According to the APPG, these reliefs help make the UK a primary destination in Europe for equity investment.
Aria Babu, head of policy at the Entrepreneurs Network, stressed that existing support for new businesses must continue to encourage this "flourishing startup ecosystem".
However, while the Government says it is keen to update and safeguard these schemes, it is yet to renew them. The APPG says this uncertainty about new businesses' futures has a "negative impact" and is likely to deter investment.
The group has therefore asked the Government to provide more clarity about the future of the SEIS, EIS and VCT schemes.
In his Autumn Statement in November, Chancellor Jeremy Hunt said:
"The Government remains supportive of the enterprise investment scheme and venture capital trusts and sees the value of extending them in the future."
There are plans to increase the generosity of the SEIS scheme, but the Government is yet to pass the necessary legislation.
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