Pressure is growing on the Treasury to increase tax relief under the Enterprise Investment Scheme (EIS) to boost investment in growth companies in the UK.

Pressure is growing on the Treasury to increase tax relief under the Enterprise Investment Scheme (EIS) to boost investment in growing UK companies.

Alex Macpherson, the chief executive of venture capitalist Octopus Ventures, says the scheme’s tax breaks for investors in early-stage ventures play an essential role in driving funding to such companies.

Adds Macpherson, ‘I would recommend a doubling of the current EIS tax relief to 40 per cent in order to further encourage entrepreneurship, attract new investors and induce a behavioural shift towards new business investment.’

Macpherson’s comments follow research released by the National Endowment for Science, Technology and the Arts (NESTA) earlier this week which reveals that 82 per cent of business angels in the UK take advantage of the EIS, while 24 per cent of angels state their investments would not have been made without the scheme.

NESTA and the British Business Angels Association are calling on the Treasury to increase EIS tax relief to 30 per cent. As it stands, the scheme allows investors to set 20 per cent of investments made under the scheme against their income tax liability for the year.