Ryecroft Glenton warns of SEIS changes

Proposed changes to the Enterprise Investment Schemes could hit small businesses and job creation, Newcastle-based Ryecroft Glenton has warned.

Ahead of the Autumn Statement in November, concerns have been raised that the Treasury is considering plans to clamp down on investors benefiting from a system that stimulates investment in UK start-ups.

Since its launch in 1993, about 24,620 companies have received investment through the EIS or the Seed Enterprise Investment Scheme (SEIS). Among them is Newcastle-based Cheviot Insured, which is aiming to grow its workforce on the back of strong growth in its first year in business.

Founded by equity fund manager Joel Marks, insurance specialist John Baty and entrepreneur Charlie Hoult, Cheviot secured more than £100,000 of SEIS investment – having been advised by Ryecroft Glenton – which was deemed essential to establishing the business.

Peter Glenton, partner at Ryecroft Glenton, said: "Cheviot Insured is a great example of how SEIS can be a real boon for start-up businesses. Cutting the relief the scheme offers investors will only serve to reduce the available funding options for start-ups, hitting business growth and job creation.

"Many investors are keen to support innovative new firms and their ideas, but they need persuading that the risk is worth taking. SEIS and EIS help to reduce the risk the investor is taking and encourages them to choose to support a start-up over a safer investment option."

Cheviot predominately provides insurance services for businesses and charities, with a particular sector specialism in technology. Its first year growth was buoyed by the SEIS funding.

Joel Marks, director of Cheviot Insured, added: "The pace of our growth in the first year has been very positive and as a result we now have the opportunity to expand our team and increase our presence in the North East region, as well as increase our reach in specific sectors, especially the technology sector.

"The support Peter Glenton and the team at Ryecroft Glenton have provided the business has been invaluable.

"In addition to its support and advice during the fundraising process, which included identifying potential investors, the firm has provided payroll, accounts and tax services to Cheviot, enabling us to focus on the development and operation of the business."