2.15 Enterprise Investment Scheme, Venture Capital Trusts and Seed Enterprise Investment Scheme - The Government announced at Budget 2011 that it would consult on options to provide new support for seed investment, simplify the Enterprise Investment Scheme (EIS) and refocus both EIS and Venture Capital Trusts (VCTs) to ensure they are targeted at genuine risk capital investments.
2.16 As a result of the consultation the Government will introduce the new Seed Enterprise Investment Scheme (SEIS) to encourage investment in new start-up companies. SEIS will provide income tax relief of 50 per cent for individuals who invest in shares in qualifying companies, with an annual investment limit for individuals of £100,000 and cumulative investment limit for companies of £150,000.
2.17 In addition, the Government will offer a capital gains tax holiday for investments made into the new scheme. This will provide for a capital gains tax exemption on gains realised on disposal of an asset in 2012-13 and invested through SEIS in the same year.
2.18 The Government will also simplify the EIS by relaxing the connected person rules and the definition of shares that qualify for relief. The Government will tighten the focus of the schemes by introducing a new test to exclude companies set up for the purpose of accessing relief, exclude acquisition of shares in another company and exclude investment in Feed-in-Tariffs businesses. In addition to these changes that were consulted on, the Government will remove the £1 million investment limit per company for VCTs to reduce the administrative burdens of the scheme. (15)
2.19 Capital gains tax: annual exempt amount - The annual exempt amount for capital gains tax will be frozen at £10,600 for 2012-13. (10)
2.20 Asset-backed pensions contributions - Following consultation, to prevent employers gaining excessive tax relief for asset-backed pension contributions to their pension schemes, the Government will introduce Finance Bill 2012 legislation that takes effect on 29 November 2011 to ensure no excessive relief can arise for new arrangements. Transitional rules will apply to existing asset-backed arrangements that have already received tax relief to ensure the correct amount is given by the end of an arrangement. (8)
2.21 Housing Benefit: shared accommodation rate exemptions - As announced on 19 July 2011, the Government will exempt former rough sleepers and dangerous ex-offenders from the extension of the Housing Benefit shared accommodation rate to single Housing Benefit claimants aged under 35. (5)
2.22 Jobseeker's Allowance - On 21 November 2011, the Government introduced flexibility into the Jobseeker's Allowance (JSA) regime to enable claimants after six months or more to be referred to full-time training for up to eight weeks whilst remaining on JSA. (6)
2.23 Tax credits: uprating - The Government will not go ahead with the planned £110 above inflation increase to the child element of the Child Tax Credit and will not uprate the couple and lone parent elements of the Working Tax Credit in 2012-13. The child element of the Child Tax Credit and the disability elements of tax credits will be uprated in line with the Consumer Prices Index in 2012-13. (21, 22)
2.24 Pension Credit: uprating - The standard minimum income guarantee in Pension Credit will rise by 3.9 per cent in April 2012 so that no single pensioner need live on less than £142.70 a week and no pensioner couple on less than £217.90 a week. The threshold for Savings Credit will increase to £111.10 for single pensioners and £177.20 for pensioner couples in April 2012. The net effect of these two measures is broadly cost neutral. (30)