The number of investors claiming tax relief on a Venture Capital Trust (VCT) investment in the 2021/22 tax year rose 32% on the previous year to 25,800, according to Wealth Club.
Using the latest numbers released by HMRC, Wealth Club identified a notable uptick in VCT popularity.
In terms of the total value of VCT investments, the figure was up by even more, rising by 61% to £1.04bn versus the previous year.
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The average amount invested by an individual was about £40,000. Investors putting in between £150,000 and £200,000 accounted for just 6.7% of all VCT investors, but 32.2% of the total money raised.
This means there were many smaller investors putting in modest sums to make the average that low.
A full breakdown of the numbers is below:
| Investment band | Proportion of investors | Proportion of funds raised |
| Up to £1,000 | 4.0% | 0.5% |
| £1,000 to £2,500 | 4.1% | 0.5% |
| £2,500 to £5,000 | 8.6% | 1.0% |
| £5,000 to £10,000 | 17.2% | 3.8% |
| £10,000 to £15,000 | 8.7% | 2.9% |
| £15,000 to £20,000 | 9.7% | 4.3% |
| £20,000 to £25,000 | 6.7% | 3.8% |
| £25,000 to £50,000 | 18.9% | 17.8% |
| £50,000 to £75,000 | 6.2% | 9.6% |
| £75,000 to £100,000 | 5.7% | 13.0% |
| £100,000 to £150,000 | 3.5% | 10.6% |
| £150,000 to £200,000 | 6.7% | 32.2% |
Nicholas Hyett, investment manager at Wealth Club, commented: “The trend is great news for UK start-ups, driving a 61% increase in tax relief qualifying VCT investments and significantly increasing the funding available to UK entrepreneurs through the scheme.
“The scheme could be even better though. There are signs the £200,000 a year limit on VCT investments, unchanged for nearly 20 years, is capping the funding available to small businesses.
“The largest VCT investors, those investing £150,000 to £200,000 a year, account for just 6.7% of investors, but 32.2% of funds raised,” he continued. “Almost all are hitting the £200,000 a year maximum – and would potentially invest more if the scheme allowed, unlocking significant further funding for small UK businesses.
“With economic growth and support for smaller companies a key priority for both political parties, the £200,000 limit is overdue a review.”
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