TaxCorporate TaxVenture capital industry fears £1bn tax hike

Venture capital industry fears £1bn tax hike

Billion pound-a-year hit tax hike fears for VC industry, but Treasury argues that it will only amount to £5m.

The venture capital industry faces a crippling £1bn a year hike in its tax bill, after the Inland Revenue changed the treatment of tax relief.

Link: Treasury may use IHT relief to encourage investment

British Venture Capital Association chief executive John Mackie has written to Gordon Brown demanding a reversal of policy.

In the letter, seen by The Times, Mackie said that the changes would be a ‘deterrent to private equity to continue to increase its investment in the UK’.

Tax relief that VC firms receive through their investment vehicles relating to interest payments has been halted, a decision that was announced on 4 March.

The Treasury said that the new rules would only cost the industry £5m a year.

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