A year ago, Chancellor Philip Hammond introduced sweeping changes to the rules governing the enterprise investment scheme (EIS) and seed enterprise investment scheme (SEIS).
His aim was to exclude the structured tax avoidance schemes set up to take advantage of tax efficiencies and instead encourage the growth businesses that are critical to the country's future.
At a stroke, his 2017 Budget brought down the curtain on asset-backed capital-preservation vehicles and shifted the focus to genuine growth-oriented companies and through a further qualification - knowledge-intensive companies - which included minimum proportions of relevant graduates on the payroll if firms were to qualify.
As this year's Budget approaches, it may be time to take stock and ask how the new regime of EIS and SEIS is bedding down.
Growth despite the rules
First indications are that investors have not been put off by the new rules. If anything, there is growth, although it is fair to add that this growth is despite, rather than because of, the new rules.
Coming to the end of the previous tax year, there was a considerable amount of uncertainty as to what would be the impact of the new rules and what would qualify for tax relief in the wake of the Hammond reforms.
The net effect was to cause a lot of people to stand off, with the result that investment fell by a significant amount. There was disruption in terms of investments planned but not made.
Since the end of the tax year, there has been buoyant levels of interest and the pipeline is very strong. Who are the investors in social terms? Many are the so-called core affluent, who sit somewhere above the mass affluent, but below the high-net worth segment of society.
Their interest in growth-company investment has been not so much stimulated by the reforms but "uncorked" by them. In the past, it tended to be advisers who steered them away from what advisers saw as risky investments. The investors overall, have been much less risk-averse.
Now, the risk-free option no longer exists, and all the evidence is that investors view the reforms in a positive light. They welcome the opportunity to invest in real businesses rather than the capital-preservation schemes that were mass produced in the past solely to take advantage of tax breaks.
The artificiality of such schemes can be illustrated by the fact that very few of the companies set up under the old rules are still in existence. Why would they be? Their only real justification was tax avoidance.