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Oxbotica Ltd and implications for venture capital

12 September 2018 / John Kingsley
Issue: 4663 / Categories: Comment & Analysis

More than meets the eye?


  • A university spin-out company was formed to develop and commercialise automotive products.
  • In September 2014 Oxbotica issued 100 000 £0.01 ordinary shares to five original subscribers.
  • HMRC’s initial view was that subscriber shares would rarely be eligible for relief under the seed enterprise investment scheme.
  • Was the money raised from the share issue too small to be of meaningful use?
  • The tribunal’s view was that HMRC’s argument regarding the amount of the investment would lead to impossible uncertainty.
  • Is it time for the venture capital schemes to be reformed to make them more user-friendly?

At first sight the issues addressed by the First-tier Tribunal’s decision in Oxbotica Ltd (TC6538) appear straightforward but there is more to this case than meets the eye....

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