THE Government is under fire over plans to create small business investment companies rather than boosting tax incentives for venture capital trusts.
The plans could strangle a vital funding lifeline for growing businesses, Chancellor Gordon Brown will be told this week.
Brown announced plans in his April Budget to set up smallbusiness investment companies to provide funding of less than pounds 1 million to small firms.
But John Mackie, chief executive of the British Venture Capital Association, said: ‘Many companies receive funding from venture capital trusts of between pounds 1 million and pounds 3 million, which these new investment companies will not fund.’ He will tell Brown that unless the Government helps venture capital trusts by improving income tax relief, the industry will be at risk of collapse from falling investment.
