VCTs

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FORTHCOMING CHANGE relating to the Venture Capital Trust (VCT) ‘sunset clause’ date: On 22 November 2023, the government announced that it will extend the existing sunset clause for the VCT scheme from 6 April 2025 to 6 April 2035. Finance Act 2024 enacts legislation to extend the availability of VCT reliefs to new shares issued before this date, where all the other relevant conditions are met. This measure comes into force on a day to be appointed in regulations.

Like the enterprise investment scheme (EIS), the venture capital trust (VCT) regime is designed to encourage investment in smaller, higher-risk trading companies.

A VCT is a company (not a trust), approved by HMRC, whose shares are admitted to trading in such a way that they meet the listing condition explained in Practice Note: VCTs—VCT conditions for HMRC approval—The listing condition.

Individuals can benefit from a range of tax reliefs, and spread their investment risk, by subscribing for (or buying) shares in a VCT, which, in turn, subscribes for newly issued shares or debt in unquoted companies (companies listed on AIM or PLUS markets (other than

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Latest Tax News

Tax weekly highlights—3 April 2025

This week's edition of Tax weekly highlights includes: (1) notification of Royal Assent for National Insurance Contributions (Secondary Class 1 Contributions) Act 2025, (2) News Analyses on the Upper Tribunal’s VAT decisions in Bolt and St Patrick’s International College, (3) a call for evidence by the Independent Review of the Loan Charge, (4) the making of regulations in respect of Multinational top-up tax to specify Pillar Two territories and qualifying domestic top-up taxes, and (5) the making of regulations to increase late payment interest and penalties.

UT rejects appeal against FTT decision that educational services were not VAT exempt (St Patrick’s International College Ltd & others v HMRC)

Tax analysis: In St Patrick’s International College Ltd and others v HMRC, the Upper Tribunal (UT) decided that the supplies of education in dispute did not qualify for exemption from VAT. It found that Group 6, Schedule 9 Part 1 to the Value Added Tax Act 1994 (VATA 1994) is compatible with the EU legislation from which it is derived and that, although there are multiple possibilities for exemption within Group 6, none of them applied to the supplies in dispute.

UT dismisses HMRC appeal that ride-hailing service did not fall within VAT Tour Operators Margin Scheme (HMRC v Bolt)

Tax analysis: In HMRC v Bolt Services UK Ltd, the Upper Tribunal (UT) decided that the services concerned fell within the scope of the Tour Operators Margin Scheme (TOMS) because it found that they were of a kind commonly provided by tour operators or travel agents and the supplier had not materially altered or further processed the services.

Upper tribunal considers appeal on pension scheme sanction charges (Morgan Lloyd Trustees Ltd v HMRC)

Tax analysis: In Morgan Lloyd Trustees Ltd v HMRC, the Upper Tribunal (UT) considered the appeal of a pension scheme trustee company (MLT) against scheme sanction charges imposed under section 239 of the Financial Act 2004 (FA 2004), in respect of unauthorised payments made by the schemes to the sponsoring employers. The UT remitted the appeal as it related to two of the payments back to the First-Tier Tax Tribunal (FTT) for further consideration but dismissed the appeal in all other respects.

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