MUCH-NEEDED new money could soon become available to start-ups and small businesses in Kirklees, it has emerged.
Business advice firm Deloitte is urging ambitious small companies and start-ups struggling to get finance from traditional sources to look to private investors for funding.
Deloitte said the Seed Enterprise Investment Scheme, which is included in the Government’s draft Finance Bill 2012, will make it more attractive for business angels and investors to support early-stage small firms.
SEIS will provide income tax relief of 50% of the investment to individuals investing up to £100,000 in qualifying companies and is expected to prove attractive to business angels.
In the first year, there will also be capital gains tax relief to kick-start the scheme, allowing individuals with gains, to exempt those gains from tax by reinvesting in a qualifying company. This could potentially offer tax relief up to 78%.
SEIS will be available from April 6, 2012, and will run alongside the existing Enterprise Investment Scheme. It is expected to cost the treasury £50m.
Tax partner Stephen Hall said: “Since the credit crunch we’ve seen more business angels coming forward and providing finance to companies who haven’t been able to get funding through traditional routes.
“A lot of successful entrepreneurs are happy to invest – they’ve taken risks in the past to get to where they are today and they’re happy to do so again for the right opportunity.”
But he said: “With increased competition for their money, Angels are getting more demanding so it is important for entrepreneurs to demonstrate a professional approach to their pitches.”