AN ACCOUNTANCY firm has warned that new rules for the financial bill this year could jeopardise the growth of tech business across the south.

The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are government initiatives which offer attractive tax breaks to small businesses in the UK. EIS offers tax breaks to investors purchasing shares in small private companies and SEIS is aimed at those investing in even smaller companies.

Both schemes, along with Venture Capital Trusts (VCTs), have raised billions of pounds for small businesses, and helped drive investment in many companies – particularly in the technology sector.

But new stricter rules affecting the schemes have been introduced for the recent Summer Budget and Finance Bill, which could harm some businesses’ growth plans, Baker Tilly has warned These new rules impose a limit on the age of a company that can apply for EIS or VCT finance and a limit in the total lifetime risk finance funds which are raised by a company of £12m - £20m for knowledge intensive companies.

There is also a rule that no EIS funds can be used to buy other companies or trades.

Kirsty Sandwell, from baker Tilly, said “These new rules will only add to the existing complexity of these important and successful schemes, and I’m concerned that high growth technology businesses in the will be the victims of new legislation.”