Government agrees further work needed to broaden the Venture Capital sector
- On October 25, 2023
- By GrowthInvest Marketing
The Treasury Select Committee publishes the Government’s response to its report on Venture Capital, in which MPs called on the UK Government to do more to tackle a lack of diversity in the industry.
The Committee recommended that the Enterprise Investment Scheme and Venture Capital Trust sunset clauses were extended. The Government confirmed this would happen, noting further details on the extension beyond 2025 will be provided ‘at a future fiscal event’. The Committee urges the Treasury not to delay this announcement, which will provide more certainty for the market.
The Government agreed with the Committee’s conclusions that more needed to be done to improve gender and ethnic diversity within the UK’s venture capital ecosystem. Despite this, the Treasury has opted not to take forward recommendations to make access to tax reliefs dependent on the provision of diversity statistics, as they feel it would result in legal complexities and administrative burdens.
The response also rejected the Committee’s call for the Government to adopt a ‘comply or explain’ policy regarding signing the Women in Finance Charter and the Investing in Women code to receive tax reliefs. While the Government agreed that the charters were essential to improving diversity, it was unconvinced this was the right approach, and unsuitable for individual investors who claim tax relief.
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