Start-up Companies: Tax Incentives

Lord Livermore Excerpts

Monday 29th April 2024 Lords Chamber

[Baroness Vere of Norbiton (Con)]

London remains one of the leading financial centres in the world. The Government are incredibly focused on our domestic equity markets to ensure that they meet our ambitions of ensuring we have capital available to small companies. My noble friend will know that the noble Lord, Lord Hill, did a review into UK listings and we are taking forward his recommendations.

My noble friend will also know that the Government are proceeding through looking at all our regulation to ensure that it is fit for purpose for the UK and UK listings under the smarter regulatory framework. He will also have seen the reforms announced by the Chancellor in Edinburgh and at Mansion House. We are seized of the opportunity we have with domestic equity markets, whether they be for large cap or small cap companies. However, we recognise that there are things we can do to make them better.

[Lord Livermore (Lab)]

My Lords, speak to any SME owner or business network and you will hear concerns about HMRC: contact wait times of over an hour, backlogs to review tax credit applications, delays of eight months to claim tax reliefs and phone lines closed for an entire summer. Tax incentives are a lifeline for many young companies. With nearly 50,000 SMEs reported to be in financial distress, does the Minister believe the problems at HMRC are now hindering economic activity?

[Baroness Vere of Norbiton (Con)]

I think the noble Lord has conflated a number of issues there into one thing. HMRC is an enormous organisation that deals with many types of individuals and corporates. Companies can contact HMRC via the corporation tax helpline—that phone line has not been closed at all—where they can get general advice on R&D or on EIS.

HMRC has also set up non-statutory advance assurance services for both elements under debate today. It means that companies can get in touch with HMRC before they make an application to make sure that, when they do make an application, it gets through first time—and, as I said in my opening answer, HMRC is working to its aims.