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Angel investor threshold will go up despite industry backlash

Angel investor threshold
Image credit: Andrew Parsons / No 10 Downing Street

An increase to the threshold for high-net-worth angel investors will take effect at the end of the month despite industry pressure to scrap the controversial policy.

Reversing the changes would require a debate in Parliament and there is not enough time to do so before 31 January, tech industry lobby group the Startup Coalition said.

Earlier this week, the Startup Coalition launched an open letter signed by more than 2,000 people calling for Chancellor Jeremy Hunt to reverse the decision to raise the minimum financial threshold to qualify for angel investor protections from £100,000 to £170,000.

The letter argued that the change would reduce funding for startups and disproportionately impact female investors and those based outside of London.

Startup Coalition executive director Dom Hallas wrote in a LinkedIn post on Friday that the Treasury “have been engaging”, but it will not be possible to reverse the decision before it comes into effect on 31 January.

“There is no legislative mechanism now available to the government to change the rules ahead of their implementation,” said Hallas.

“If the government had engaged more fully when we (and others) had first raised this as an issue some time ago, this wouldn’t have been the case.”

Hallas said the Treasury has “acknowledged the strength of the case” and is keen to work out a resolution that satisfies everyone.

“We will be working with HM Treasury and others in the coming days and will update as soon as we have more,” Hallas said.

He added that the Startup Coalition has set up meetings next week with Bim Afolami, the city minister. Kevin Hollinrake, the business minister, will also be writing to the Treasury to raise the issue, Hallas said.

UKTN has contacted the Treasury for comment.