UK government to invest £400m in venture

In a further boost to startups, chancellor Philip Hammond said the government will invest £23bn in innovation and infrastructure over the course of five years. Beringea managing partner Stuart Vale said in a statement he was encouraged by the chancellor's focus on research, development and innovation, which he said marked positive news for the British tech sector.

Earlier this week, prime minister Theresa May announced the launch of a review panel focusing on supporting the growth of startups to be chaired by Permira's former chairperson and managing partner, Damon Buffini.

The chancellor's statement also confirmed the government is to reduce corporation tax to 17%, which White & Case's international tax partner Prahbu Narasimhan said will accelerate investment. However, the government is also to limit the amount of profit that can be offset by carried forward losses to 50%.

Hammond revealed a bill will be published including revisions to VCT and EIS regulations, with the intention of simplifying rules for share conversions and increasing flexibility for VCTs to make follow-on investments.

Last year, the UK government made changes to VCT and EIS structures in order to comply with European state aid rules. The new regulations mean VCT and EIS funds can no longer take ownership stakes, are limited to investing a maximum of £12m per asset – £20m where the business is judged to be "knowledge-intensive" – and can only invest in companies under a certain age.

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• Topics
• Financing
• UK / Ireland
• Venture
• United Kingdom