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More Autumn Statement details

One loop hole that the Chancellor has closed off in his Autumn Statement was not so fully reported but he has decided to close off the final loophole enabling investment in subsidised renewables within a tax shelter like enterprise investment schemes or venture capital trusts. Some think this could trigger a last minute dash of funds coming into renewables before the Government ends the existing tax arrangements next year.

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The new rules were buried deep within the statement’s supporting documents and indicate that community energy projects and anaerobic energy plants will cease to benefit from EIS, seed enterprise investment scheme and VCT eligibility from next April and   “All other companies benefiting substantially from subsidies for the generation of renewable energy will be excluded from also benefiting from EIS, SEIS and VCTs with effect from 6 April 2015.” 

The rules follow the announcement in the Budget that VCT and EIS could not invest in solar or wind projects. This left hydro and anaerobic digestion, where waste is broken down to produce energy, as the remaining renewable alternatives eligible for VCT and EIS investment.  Robertson Hare partner Philip Hare says the latest announcement could trigger a surge of money coming in before the curtain comes down on them on 6 April. “I suspect there will be a mad rush into these investments up until 5 April a bit like when solar and hydro were excluded in the Budget.

The change is no surprise to Tilney Bestinvest managing director Jason Hollands, who says HM Revenue & Customs was concerned at the double tax breaks and the fact there was no real risk involved. “These are essentially underpinned by Government subsidy and are obviously attractive to investors because you are able to access tax efficient investments which are relatively low risk.” Enables IFA’s are concerned to be on top of changes that may affect wealth management and are happy to help you look at helping you make your long term investments as low risk as possible.

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