The venture capital trust (VCT) sector raised GBP542 million in the 2016/17 tax year, the second highest amount raised on record and an 18 per cent increase on last year’s figure of GBP458 million, according to the Association of Investment Companies (AIC).
This is the highest amount raised since 2004/5 (GBP779 million) when income tax relief was increased from 20 per cent to 40 per cent.
VCT assets under management to 5 April 2017 (GBP3.9 billion) are also up on last year’s GBP3.6 billion.
Ian Sayers (pictured), chief executive of the AIC, says: “These figures are a testament to the ongoing demand for VCTs by investors, boosted by the pensions restrictions and attractions of a tax-free yield, and the ability of managers to adapt to the new investment rules.
“But most importantly this is great news for UK smaller companies who are accessing the finance and expertise they need to grow. VCTs have an excellent track record of providing scale-up capital to smaller companies, creating growth, jobs and innovation. The growth of smaller companies is vital for the UK’s economic success and some of the businesses VCTs support develop into household names.”