Investors tempted with juicy tax breaks should note the higher risk

tax efficient vehicles

The reduced tax breaks on VCTs may mean that EISs get more attention from investors, however investors should note that the new smaller size for qualifying companies means these vehicles are riskier

The vast majority of people in the UK could be forgiven for taking the March Budget speech with a pinch of salt, which according to many commentators contained little more than politics and puff. However, anyone interested in smaller, entrepreneurial companies hopefully took note of the changes made to venture capital trusts (VCTs) and enterprise investment schemes (EISs). Hidden in the Chancellor's speech and customary lengthy report were changes which could have a subtle, but long-term effect on small company investments in the UK. First: a reminder of the changes. The Budget measures d...