Tax breaks given to investors in growing companies more than pay for themselves, according to research conducted by one fund manager.

Tax breaks given to investors in growing companies more than pay for themselves, according to research conducted by one fund manager.

Albion Ventures, which manages seven venture capital trusts (VCTs), says that its investments in small and medium-sized enterprises have created more than 2,000 full-time jobs which will generate £16.5 million this year in income tax and national insurance contributions.

Some £65.7 million has been claimed as tax relief by investors in Albion’s VCTs, which means the Treasury is receiving an annual return of 25 per cent on its investment before allowing for corporation tax, the research claims.

Patrick Reeve, managing partner at Albion Ventures, says that VCTs ‘clearly benefit UK plc’s balance sheet and also stimulate enterprise, entrepreneurship and ground breaking advances in many sectors’.

Government tax revenues saw their worst slump since the 1920s this week, with the Treasury’s take sliding £32 billion, or ten per cent, because of falling personal incomes and company profits.