The Government should introduce a special Covid Investment scheme to give businesses more support in 2021 and enable them to survive, say leading accountancy and tax advisory firm Blick Rothenberg.
Robert Pullen, a tax partner at the firm said: “A special Enterprise Investment Scheme relief could be created just for the pandemic, the Covid Recovery Investment Scheme or CRIS. If more action is not taken , 2021 could be a disaster for business and jobs.
He added: “Rather than looking to increase taxes now, the Government needs to find innovative ways to support business without increasing the deficit further.
“The tax system is a great way to directly influence the country and people’s behaviours, as we saw with the eat out to help out scheme. One way to help business in 2021 could be to introduce tax relief for investment into coronavirus affected companies.”
Robert said, “for a number of years, we’ve had a tax relief known as the Enterprise Investment Scheme or EIS. This helps start-ups find investment from private individuals they wouldn’t usually be able to access, by offering the investor a tax break, which for EIS is 30% of your investment back as an income tax refund, amongst other benefits.”
He added: “ The Government could introduce eligibility criteria – like the CBILS initiative had – and give investors 25% income tax relief for what they put in, with a minimum 3-year investment period. This will support businesses with longer term finance, protect jobs in the worst affected sectors and encourage individuals to deploy capital in the UK, rather than internationally.”
Robert said, “The Government should be commended for supporting the economy throughout the pandemic, with bounce back and coronavirus business interruption loans, job support schemes and tax deferrals to name a few.
“But talk is already now moving on to consider how to pay down the deficit – starting with rumoured capital gains tax increases – before the economy has even had a chance to draw breath, let alone recover.”
He added: “If the Government does not want to continue to provide long term financing for business in 2021, they could shift the burden to the private sector, with some encouragement in the form of a similar tax relief.”