Venture Capital Trust providers warn solar VCTs may cease to exist following George Osborne's latest proposals.
Despite a broadly supportive Budget for VCTs, which included plans to give them wider investment remits, solar power-focused businesses will be added to an excluded activities list, meaning they will lose their tax breaks.
Unicorn fund manager Chris Hutchinson says this means solar VCTs are effectively "dead in the water".
"I echo George Osborne's comments a VCT should invest in genuine businesses which in turn creates genuine employment and helps grow the economy, as opposed to these solar VCTs which were only set up to take advantage of the double tax break," he says.
Julian Hickman, partner at Longbow Capital, adds:"The solar VCTs are now dead as we have today learnt solar feed-in tariffs will be added to the excluded list.
"I believe this is appropriate as to gain the tax breaks they should be investing in venture capital and 60%-70% of these solar VCTs have not been over the last couple of years."
However, other changes, including increasing the level of assets for qualifying businesses as well as the number of people they can employ, have widened the scope of businesses in which VCTs can invest, managers say.
"The Budget has put VCTs and EIS back where they belong and that is at the heart of enabling private investors to get behind British innovation and allow more companies - not just start-ups - to benefit from tax-efficient investment," Hickman says.
"We are pleased the amount that can be raised by VCT or EIS means we can raise a lot more capital on sensible terms and we can now make a meaningful investment in a decent size business."
Hickman adds the changes will allow more money to flood into VCTs and EIS, which in turn will allow more companies the opportunity to benefit from tax-efficient investment.
"The Chancellor has dealt a very generous hand to British companies involved in creating wealth through innovation. The number of businesses that will be able to benefit from EIS and VCTs will increase dramatically as a result of today's Budget."
Managers also warn VCTs and EIS which do not invest in British-based innovation are unlikely to survive after Osborne stated the vehicles should be targeting "genuine risk capital investments".
Hickman says: "The Chancellor indicated over the next twelve months we will see rules emerge that will refocus both EIS and VCTs to ensure they are targeted at genuine risk capital investments."
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