Venture Capital Trusts look set to stay

17 March 2010

The government has indicated ahead of the Budget that Venture Capital Trusts will still have a part to play in the business economy.

There had been some speculation that the scheme may be axed as part of the likely round of spending cuts, but the government appears to have headed off questions over the future of VCTs.

VCTs offer private investors income, dividend and capital gains tax breaks when they put money into unquoted or Alternative Investment Market firms.

So far VCTs have attracted £3 billion worth of investments.

Ian Pearson, the Economic Secretary to the Treasury, has said: "This government is committed to ensuring that VCTs continue to play a positive role in encouraging investment and enterprise in the economy, and contribute to further growth and employment in UK companies."

A report from the Association of Investment Companies (AIC) found that the majority of the 300 companies involved in the study had grown as a result of VCT funding.

Ian Sayers, director general of the AIC, said: "We urge policy-makers to reaffirm their commitment to VCTs which are the best way to support enterprise and future economic growth. New initiatives are unlikely to have the substance or staying power of the well established VCT network."