V770 - Support our Startups! Bill 2015 (Second Reading) Watch

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On the contrary, No (4)
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Abstain (13)
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Birchington
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B770 - Support our Startups! Bill 2015 (Second Reading), TSR Conservative & Unionist Party


Support our Startups! Bill 2015



A bill to provide legislative measures designed to provide comprehensive help to British SMEs by encouraging finance, attracting international talent and supporting serial entrepreneurship


BE IT ENACTED by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

  1. Definitions
    1. Small and Medium Enterprises (hereby referred to as SMEs) are defined to be an enterprise with fewer than 250 employees, an annual revenue less than £25.9 million, and a balance sheet not more than £12.9 million.
    2. STEM Subjects are defined to be a subject classed in the fields of Science, Technology, Engineering and Mathematics.
    3. Seed Accelerators are defined to be programs which provide pre-seed stage investment and time limited support (comprising mentoring, events etc.) in exchange for equity (See Notes section for a more detailed definition).
    4. Angel Investors are defined to be an investor who provides financial backing for small startups or entrepreneurs.
    5. Crowdfunding is defined to be the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet.
  2. Visa Reform
    1. The Tier One (Post Study Work) Visa shall be reintroduced for graduates that have studied a STEM subject to a graduate level.
    2. The Tier One (Graduate Entrepreneur) Visa shall be amended as follows:
      1. The Visa Cap of 10 Visas per institution shall be increased from 10 to 50.
      2. When the visa cap is reached, institutions may apply for a discretionary extension, at a duration of one year, subject to the approval of the Home Office.
      3. The type of authorised endorsing bodies shall be reformed to include Seed Accelerators.
    3. The Tier One (Enterpreneur) Visa shall be amended as follows:
      1. The type of approved funding sources shall be reformed to include accredited Angel Investors, as well as Crowdfunding based financing.
  3. Corporate Venture Capital
    1. The Corporate Venturing Scheme shall be revived, with participating firms subject to the conditions as follows:
      1. The investing firm shall not own more than 40 per cent of the issuing company, nor be able to exercise control of the issuing company.
      2. The investing firm shall not exist wholly for the purpose of carrying on non-financial trades, or if it is a member of a non-financial trading group of companies, exist wholly for the purpose of carrying on non-financial trades, investment (or other non-trade businesses), or be the parent company.
      3. The issuing firm must be an unquoted company and must not have made any arrangements to become a quoted company.
      4. The issuing firm must have gross assets of no more than £7 million immediately before, and £8 million immediately after the issue (if the issuing company is the parent company of a group, this test is applied to the group as a whole).
    2. The investment relief for an investing firm shall be set at 20% of the amount subscribed in full risk ordinary shares of the issuing firm.
  4. Entrepreneur's Relief Reform
    1. The lifetime allowance of £10 million shall be reformed into an allowance of £8 million over the course of three years.
    2. The requirement that the claimant must be a full time employee shall be abolished.
    3. The requirement that the claimant must hold a minimum of 5% of the shareholding of the company shall be abolished.
  5. SEIS & EIS Tax Relief Reform
    1. The limit to which a company can raise funding from SEIS shall be increased from £150,000 to £250,000.
    2. Convertible Debt shall now be eligible for both EIS and SEIS tax relief.
  6. Financing Reform
    1. Financial Institutions regulated by the Prudential Regulation Authority that provide lending to businesses shall now be mandated to suggest alternative Crowdfunding platforms should a loan not be approved.
    2. The domestic division of the national Sovereign Wealth Fund, "British Investments - Britain", shall now be permitted to invest utilising crowdfunding platforms for up to 5% of the fund's overall value.
  7. Short Title, Commencement and Extent
    1. This Act may be referred to as the Startups Act 2015.
    2. This Act will come into effect on the 1st of January 2016.
    3. This Act extends to the entire British Republic.

Notes
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  1. The definition of Seed Accelerators can be expanded upon by the NESTA publication "The Startup Factories".
  2. The Visa Reform section of this bill is inspired by the COADEC publication "Startup Manifesto".
  3. Tier One visas form the category of work visas for individuals deemed "Highly Skilled". More information can be found on UK Permits' webpage.
  4. The current requirements to be eligible for Entrepreneur's Relief can be found here. By removing the requirement to be an employee, incentives are created for business angels to provide equity finance to small businesses. By reforming the allowance into an annual figure, entrepreneurs are encouraged to continue building new startups rather than simply retiring after the sale of a successful business (known as Vicarage Syndrome), thus providing further employment and innovation opportunities.
  5. The revival of the Corporate Venturing Scheme is designed to encourage the return of offshore cash holdings by large corporations in a manner that is mutually beneficial for many stakeholders. The expected rise in corporation tax revenue as issuing companies grow should compensate any tax revenue cost significantly. Furthermore, the reintroduction of the scheme does not include the deferral relief nor the loss relief that its previous implementation contained.





Changes
  1. Amended Section 4.1 into an allowance over the course of three years

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RayApparently
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Exclamation marks in bill titles lol.


Aye.
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Birchington
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Ayes to the right: 18
Noes to the left: 4
Abstain: 13

The Ayes have it! The Ayes have it! Unlock.

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