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"I was (and still am) a registered entrepreneur through this site and managed to set up with the help of someone who liked my proposal. I set up a property company which is beginning to take off thanks to help from this site."
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Paul Kewley |
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Call for more tax relief for UK angels
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Jamie Murray-Wells, the 28 year-old founder of online retailer Glasses Direct, said investors who have the guts to pump money into “high risk” start-ups should not have to pay any tax on their income for the first two years, because they were helping to boost much-needed growth for the economy.
The young entrepreneur said the current Enterprise Investment Scheme (EIS), which offers income and capital gains tax relief to investors, “does not go far enough” to convince investors to back the earliest stage companies.
He believes the rate of income tax relief available under EIS could be expanded considerably from its current 30pc to about 50pc and “up to 100pc” for the most risky investments. The call comes ahead of Global Entrepreneurship Week, which launches tomorrow, with Mark Prisk, the Business Minister, set to deliver a speech to budding entrepreneurs encouraging them to turn ideas into a reality.
Earlier this year, the Government raised the available income tax relief from 20pc to 30pc – announced in the March Budget – and began consulting on other changes to the EIS.
But Mr Murray-Wells called on the Treasury to go much further.
“Investing in companies at a really early stage is a good thing, so it doesn’t seem to me that we should be taxing that,” he said. “In those extremely high-risk investments, where no bank is particularly lending money [to the start-up], those who have the guts to do that should be completely free from income tax.”
The Government is keen to encourage angel investors because they typically back fast-growing businesses creating innovative new products and services.
Mr Prisk said: “Up and down the country, dynamic, innovative entrepreneurs are creating jobs and driving sustainable economic growth. It is vital that we do all we can to help them realise their ambitions and transform the economies of their communities.”
But Youth Business International, the charity which runs Global Entrepreneurship Week, said more than half of young people did not feel encouraged to become entrepreneurs, despite many of them wanting to, according to a recent study of 1,000 students.
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