Investment in Venture Capital Trusts increases 68 per cent in 21-22

Figures released by HMRC show investment into Venture Capital Trusts (VCTs) hit £1.112 billion in the 2021-22 tax year, a 68 per cent increase on the £668 million in the year before.

This is despite the number of companies operating under this model dropping to 52, from 57 in the previous year, possibly in part due to an increase in the number of schemes launched to raise funds, which hit 46, up from 40.

The VCT a scheme was first introduced by the government in 1995, with the aim of encouraging investment into businesses which need next stage funding, boosting entrepreneurial activity by offering tax breaks for investors.

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Alex Davies, CEO and founder of Wealth Club said: “Having raised £1.122 billion this tax year, VCTs are really edging into the mainstream. They are packed with some of the fastest growing and most exciting early stage UK businesses and can complement an existing pension and other more mainstream investments as well as provide investors with an attractive tax free income stream. 

“Wealth Club’s own figures published in April had already shown that the last tax year was a bumper year for VCTs and the official figures released by HMRC today highlight the extent to which the scheme is working.

“Businesses raising money from VCTs over the past year include Bournemouth-based Outpost VFX, creating visual effects for film and TV, Peckwater Brands, a delivery franchise for kitchen operators, Peppy, which is supporting individuals to access health experts on issues such as fertility and menopause, and Popsa’s photobooks.

“These numbers are really promising for the British economy and investors alike and really demonstrate the success of the scheme. Despite economic uncertainty demand for VCTs in the current tax year is also holding up and we expect it to be another bumper year.”

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