BVCA response to the Autumn Statement

Responding to George Osborne’s Autumn Statement, Tim Hames, Director General of the British Private Equity & Venture Capital Association (BVCA), said:

“The BVCA welcomes an Autumn Statement that continues to support growing businesses, entrepreneurs and the investors who support them.
In what was actually a marginal fiscal tightening overall, measures that do increase resources to encourage growth and investment are to be doubly welcomed.
We have specifically called for an increase in the Social Investment Tax Relief to £5m, to create a genuine market in this important sector so this confirmation was particularly welcome, as was the increase in R&D tax credits and £400m for Enterprise Capital Funds.
Perhaps most excitingly though is further announcements from the Chancellor on creating a ‘Northern Powerhouse’. BVCA members invested over £900m in new businesses in the North in 2013 and new infrastructure and financial support will help us do more still.”

Responding to the accompanying documentation involving Investment Managers and Disguised Fee Income:

“Annual management fees paid to managers of private equity funds are typically based on a percentage of assets under management. The structure of the fee arrangements differ across our industry and consequently the tax treatment of the fees can vary. However any management fee income used to pay salaries is subject to income tax. The BVCA will work with the Treasury and HMRC to deal with any concerns they might have about current arrangements. We welcome the clear statement from the Treasury that carried interest is not an area that merits investigation”.

Notes to editor