Peer2Peer Finance News
The UK's first peer-to-peer finance magazine for investors and the industry
  • Home
  • News
    • Personal Finance News
    • Industry News
    • SME News
    • Global News
  • Property
  • IFISA
    • IFISA Guide
  • Video
  • Open Banking
  • Cryptocurrency
  • Features
    • Joint Ventures and Promoted Content
  • Comment & Analysis
  • What is P2P?
  • Partners
  • Events
    • Past Events
  • P2P Power 50
    • Power 50 2020
    • Power 50 2019
    • Power 50 2018
    • Power 50 2017
  • Sign up to our e-newsletters
  • Magazine
  • Directory
  • Jobs
  • My Account
    • Manage Account
    • Change Password
    • Log In
    • Log Out
shutterstock_701622064
April 24 2020

Tax expert warns tech firms will struggle to access government support

Marc Shoffman Industry News, News, Top 3 Blick Rothenberg, coronavirus, David Hough, Future fund, seed enterprise investment scheme

Questions have been raised about whether the government’s £500m future fund will help technology businesses with little history of raising finance.

The future fund offers convertible loans ranging from £125,000 to £5m from the government, subject to at least equal match funding from private investors.

Firms must have previously raised at least £250,000 in equity investment from third-party investors in the past five years.

Read more: Fewer than half of CBILS applications approved

Read more: Chancellor urged to look to Switzerland for CBILS improvement

But David Hough, partner for tax and advisory firm Blick Rothenberg, has argued that it is a tough time to find investment and it would be more attractive if existing seed enterprise investment scheme reliefs were expanded.

“Convertible loans partially protect the taxpayer as the government retains an equity interest in start-up businesses that cannot repay the loans within the 36 month term, however eligibility rules for the future fund scheme mean that accessing funding will be difficult for many technology businesses”, Hough said.

“Companies need to obtain funding from private investors and have a history of raising finance from third parties in order for the government to match the amount raised under the terms of the future fund.

“For many private investors, themselves feeling the impact of economic uncertainty, they may be feeling that now is not necessarily the right time to take on additional risk.

“In order to incentivise investment from private individuals, the Government should look to expand existing tax reliefs, such as the SEIS.”

Blick Rothenberg suggests the SEIS rules on the size and age of the firm could be relaxed.

Currently, firms applying for SEIS must have traded for less than two years and fewer than 25 employees.

Read more: P2P industry urges faster roll-out of Covid-19 loans scheme

Lendahand overhauls social impact strategy Covid-19 contributes to contraction in fintech funding 

Related Posts

Real estate investment, home loan, reverse mortgage, savings to buy home concepts.

Industry News, News, Property, Top 3

Real estate lenders expect post-Covid growth

The sign above the entrance to the Metro Bank on January 29, 2015 in Reading, England

Industry News, News, Top 3

Metro Bank starts offering RateSetter loans in its branches

Teacher presenting investment strategy to become a successful bu

Global News, Industry News, News, Property, Top 3

European P2P investors positive about P2P in 2021

Popular posts:

  • SMEs warned they could be excluded from recovery loan scheme
  • JP Morgan chief predicts shift to non-bank lending
  • FCA has increased surveillance over last 12 months
  • Arrest made in Buy2Let Cars investigation
  • P2P veteran joins bridging lender
  • Every IFISA that is open for investment right now
Back To Top
  • Home
  • Contact
  • About
  • Team
  • Advertising
  • Subscribe
  • Privacy
  • T&Cs
  • Disclaimer

Follow Us on Social Media

© Peer2Peer Finance News 2020
• Additional design by