Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether her Department has made an assessment of the potential impact of reducing VCT Income Tax relief on the outcomes from doubling the lifetime investment limit for qualifying companies.

At Budget, the government announced a comprehensive package of entrepreneurship tax measures designed to provide substantially enhanced support for scaling businesses across the UK. This includes doubling the maximum amount that a company can raise through the Enterprise Investment Scheme (EIS) and the Venture Capital Trust (VCT) scheme. These increases are expected to lead to around £100 million per year of extra investment into the most successful scaling companies, supporting their further growth and development.

The Government recognises that there may be other ways we could support companies to scale in the UK. We have therefore launched a Call for Evidence on tax policy support to gather views and evidence from founders, entrepreneurs, scaling companies and investors. This will assess the impact, accessibility, and generosity of existing schemes, and explore potential policy options to go-further.

A Tax Information and Impact Note published at Budget outlines the policy rationale and expected impacts of these measures. It can be found here: https://www.gov.uk/government/publications/enterprise-investment-scheme-eis-and-venture-capital-trusts-vct-changes/venture-capital-trusts-enterprise-investment-scheme-investment-limit-increase-and-restructure

The Policy Costings document contains further information on the costing methodology. This can be found here: https://assets.publishing.service.gov.uk/media/692872fd2a37784b16ecf676/Budget_2025-Policy_Costings.pdf