HMRC is to review the effectiveness of its Venture Capital Scheme tax status, including Enterprise Investment Schemes and Venture Capital Trusts.
The review will commence later this year and run until the end of January 2015.
The tax authority plans to investigate the use of Venture Capital tax schemes by investors and investee companies.
It says it will focus on “the effects of the recent expansion of the schemes in 2012”.
Venture Capital Schemes are designed to encourage investment in smaller companies. It includes EIS’, VCTs, Seed Enterprise Investment Schemes, Share Loss Relief and Corporate Venturing Schemes.
In 2012, the Government widened the Venture Capital Scheme programme. It included widening thresholds for qualifying companies in VCTs and increasing EIS income tax relief to 30 per cent.
HMRC is currently seeking a third-party to carry out the research. It was unable to comment further at the time of writing.