March 28, 2011 10:56 pm
Angel investors are to be given more tax breaks to encourage investment in nascent businesses as part of David Cameron’s efforts to build an enterprise culture based on the nation’s “doers and grafters”.
George Osborne, speaking alongside the prime minister on Monday, said he wanted to offer more incentives to those investing in start-ups, having already extended the Enterprise Investment Scheme, targeted tax breaks for investors, in last week’s Budget.
The chancellor plans to consult on whether it would be possible to have a two-tier EIS scheme that offered more generous tax relief for seed investments. “It is not something we are ready to go on,” he said. “We will work on getting it right in the next 12 months.”
One idea being discussed in Whitehall is whether to introduce a new 50 per cent tax relief rate for sums of up to £500,000 invested in start-ups.
The promise was welcomed by entrepreneurs and angel investors in the audience at the launch of StartUp Britain, a campaign organised by business founders to encourage more people to take the plunge and help new ventures grow bigger and faster.
Doug Richard, a former panellist on the BBC’s Dragons’ Den series, who has started several businesses himself, said more investors needed to be encouraged to back start-ups early in their evolution.
“It is not small business that supports economic growth, but young businesses that grow fast,” the US-born entrepreneur said.
StartUp Britain, inspired by the Obama-backed StartUp America initiative, is based around a website offering tips and money-off offers to those seeking to start a business.
It differs from previous UK enterprise initiatives in that it has sought no government funding, instead generating donations of time and money from other entrepreneurs and businesses.
Views from British entrepreneurs to StartUp Britain were mixed, with many using Twitter and website message boards to point out the perceived shortcomings.
Some were concerned with the presence of large foreign companies on the list of sponsors, complaining that this undermined UK-based businesses that provide the same services.
Andy Turner, founder of Interview Guru, an online interview coaching service, said he struggled to find the use of another start-up web portal.
“The site feels like a bunch of discount codes and deals to hook more customers that already exist elsewhere,” he said.
“Getting banks to lend the money would be a much better start.”
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