Greater than 140 London-listed firms together with Fevertree Drinks, Jet2, Mothercare and YouGov have warned the chancellor that uncertainty over the continuation of an important tax incentive is damaging investor confidence forward of this month’s Price range.
The letter represents a complete warning to Ms Reeves from dozens of distinguished firms in regards to the impression of current hypothesis in regards to the abolition of BR for inheritance tax.
It’s understood to have been organised on the behest of Octopus Investments, which is invested in a big portfolio of AIM shares via its AIM Inheritance Tax Service.
Cavendish, the funding financial institution which acts for roughly 1 / 4 of all AIM-listed firms, is claimed to have corralled most of the signatories to the letter.
Among the many different backers of the plea to the chancellor, which was despatched final month however has not been reported, have been Arbuthnot Banking Group, Cake Field Holdings, FRP Advisory, Gateley, H&T Group, Marlowe, M&C Saatchi, Mortgage Recommendation Bureau, Nichols, Revolution Bars, Revolution Magnificence, Science in Sport, Staffline, Tasty, Virgin Wines and Warpaint.
In it, they are saying that AIM “has given innovative businesses like ours the ability to access patient capital as we grow” because it was established 30 years in the past.
“Underpinned by important tax reliefs like Business Relief on Inheritance Tax, AIM has become one of the most successful growth markets in the world.
“Whereas there are a small variety of specialist funds investing in firms listed on AIM, a major share of our shareholder base is made up of particular person traders.
“BR compensates those investors for some of the additional risks associated with investing in growing companies.
“This funding kinds the muse of AIM as a important progress platform for smaller firms.”
The letter is the latest warning to Ms Reeves to emerge in recent weeks, with the bosses of leading brokers such as Peel Hunt and Dame Julia Hoggett, chief executive of the London Stock Exchange, signalling that the viability of the junior London market would be threatened by the abolition of BR.
The Treasury has refused to comment on the intensifying speculation ahead of the Budge.
City sources said the companies’ collective letter had also been sent to other Treasury ministers as well as to Jonathan Reynolds, the business secretary.
It was sent amid estimates that the chancellor could need to raise as much as an additional £25bn from tax rises in order to avoid a return to austerity.
“The character of BR laws implies that qualifying traders, who’re suggested to make these funding selections as a part of property planning, take a long-term strategy as a result of they’ve little incentive to promote in concern of a market downturn,” the letter added.
“Current uncertainty round the way forward for BR, created by media hypothesis, has considerably impacted the power of AIM companies to lift capital.
“A lack of clarity on the future of this relief has damaged investor confidence, showing clearly the close link between the relief and the future success of the market.
It added that the chancellor should use her inaugural Budget to restate Treasury support for BR for qualifying AIM-listed shares.
“Excessive-growth companies are important to our economic system, when it comes to job creation, innovation and, more and more, the power to reinvigorate elements of the UK which have suffered from an absence of funding.
“Clear government support for BR will restore confidence in the AIM market and help it to play a key role in driving economic growth, ensuring the UK remains competitive for high-potential businesses.”
Different signatories included Courageous Bison Group, Brickability, Brooks Macdonald, Comptoir Group, Crimson Tide, Hargreaves Providers, Clever Ultrasound, Music Magpie, Ramsdens, Safestay and Union Jack Oil.
Octopus Investments and Cavendish each declined to remark.
