Forum urges government to cut taxes for private lenders

The Forum of Private Business is urging the government to cut taxes for private lenders, as well as equity investors, in order to boost credit conditions for small businesses.

During yesterday’s speech at the Conservative Party conference chancellor George Osborne announced a ’credit easing’ scheme — likely to involve creating bond markets from mixed SME debt packages, reminiscent of the debt trading that sparked the credit crunch and a medium-term strategy at best.

The forum is calling for further measures to allow alternative lenders to compete with mainstream banks, in addition to a plan to boost equity investment via tax breaks for venture capitalists.
In a letter to HM Treasury in response to the government’s ’tax-advantaged venture capital schemes’, the forum welcomed a proposal increase to 30 per cent tax relief available for equity investors under the Enterprise Investment Scheme, but also called for tax incentives for private lenders to boost the provision of non-equity finance for small firms.