VCT Fundraising up 11% in 2020/21 Tax Year
- On April 8, 2021
- By GrowthInvest Marketing
– VCTs raise £685 million in the tax year to 5 April 2021
– Fundraising remains slightly below pre-COVID levels
Today the Association of Investment Companies (AIC) published the amount of money raised by VCTs for the 2020/21 tax year. During the pandemic and at a time when the UK’s young companies have needed it most, the VCT sector has raised £685 million for investment in small, innovative UK businesses.
This represents an 11% increase compared with the 2019/20 tax year when the outbreak of the pandemic hit VCT fundraising and £619 million was raised. It is 6% below the year of 2018/19, when funds raised by VCTs totalled £731 million. A table of historic VCT fundraising can be found below.
Ian Sayers, Chief Executive of the Association of Investment Companies (AIC), said: “It’s really positive that during the pandemic 11% more was raised to support the UK’s most innovative and fast-growing businesses than the year before. This investment will support healthcare, science and technology businesses which have helped in the battle against coronavirus and supported us to adapt to life in lockdown. It demonstrates that demand for VCTs and the benefits they bring investors remains high at an extremely difficult time.”
Why do private investors invest in VCTs?
Recent research by the AIC offered new insight into private investors’ motivations for using VCTs.1
Tax relief is the primary reason for investing in VCTs for 72% of private investors, while for the remaining 28% other reasons are more important.
Almost nine in ten VCT investors (88%) said it was important to them that VCTs help support the UK economy2 and more than four-fifths (84%) believe that by using VCTs they’re helping UK entrepreneurs.3
81% of VCT investors feel that by using VCTs they’re supporting cutting-edge science such as healthcare and technology innovations.4 74% invest in VCTs for the growth potential of backing young companies early and two thirds (67%) appreciate they can support green technologies by using VCTs.5
More than four-fifths of VCT investors (81%) feel the pandemic has made supporting smaller UK businesses more important.6
The goal of most VCT investors is saving for retirement (56%), whilst 44% use them for saving for their families. The AIC’s survey found that more than four-fifths of VCT investors (84%) are satisfied with their experience of VCTs and just over three-quarters (76%) would recommend VCTs to other investors.
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