Oxford Technology Ventur... Share Discussion Threads

[timbo003] 06/6/2014 14:27

Excellent news




No idea what HMRC are going to do next, hopefully it will be to rescind the decision entirely, although there will almost certainly be conditions attached


6 June 2014

Oxford Technology VCT Plc: notice to shareholders: HMRC set aside
decision of 7 March 2014 to withdraw VCT approval and will reconsider
afresh the issue of withdrawal of VCT approval

Following consideration of a legal opinion given on behalf of the Oxford
VCTs by Graham Aaronson QC and Jonathan Bremner of Counsel, instructed
by Joseph Hage Aaronson LLP, HMRC have today notified Joseph Hage
Aaronson LLP that the decision dated 7 March 2014 to withdraw venture
capital trust approval from Oxford Technology VCT Plc ("OT1") and Oxford
Technology 3 VCT Plc ("OT3") has been set aside.

HMRC will now consider afresh whether it will be appropriate to withdraw
VCT status from OT1 and OT3, and to assist their consideration of this
matter they have invited Joseph Hage Aaronson LLP to make additional
representations relating to the issue.

The effect of this is that the VCT status of OT1 and OT3 is, at the
moment, to be treated as not having been withdrawn so that shareholders
need not take any steps in relation to this matter. If, in the light of
the further representations HMRC decide that VCT approval should not be
withdrawn then that will conclude the matter so far as the shareholders'
tax position is concerned.

If, on the other hand, HMRC decide that such approval should be
withdrawn, then shareholders will be notified accordingly and will need
to consider what steps they should take.

[timbo003] 28/5/2014 17:35

Some coverage in Investors Chronicle, worth a read

[timbo003] 24/5/2014 16:55

See the meeting report from Tuesday's OXTAG meeting for shareholders of Oxford Technology 1 and 3 VCTs

Meeting report:



Campaign web page:

[127tolmers] 07/5/2014 20:20

From Oxford Tech website as no RNS announcement

hxxp://www.oxfordtechnology.com/

OT1 & OT3's appeal against HMRC withdrawal of VCT approval – Update

At the meeting held 28 April between HMRC and Oxford Technology and its legal advisers, it was agreed that certain detailed arguments in support of the VCTs' appeal would be submitted in writing to HMRC, who will consider them as urgently as possible.

It is expected that these detailed arguments will be provided to HMRC before the end of this week.

[127tolmers] 23/4/2014 08:08

From Oxford Tech website as no RNS announcement

hxxp://www.oxfordtechnology.com/

OT1 & OT3's appeal against HMRC withdrawal of VCT approval – Next Steps

On 26 March 2014 OT1 and OT3 appealed against HMRC's withdrawal of VCT approval. The appeal will be led by Graham Aaronson QC of Joseph Hage Aaronson LLP.

The statutory appeal process requires that the appeal is first made to HMRC. In the event that the matter cannot be resolved at that initial stage, provision is then made for a review by HMRC of its decision and, if the outcome of the review is not favourable, an appeal to the First-tier Tribunal (Tax Chamber), which is independent of HMRC.

HMRC has helpfully offered to meet to discuss the appeals process and any request for re-approval with Oxford Technology directly. Oxford Technology has accepted this offer and it will therefore be engaging in a dialogue with HMRC in order to determine whether this matter can be resolved by agreement. To this end a meeting has been scheduled for 28 April 2014 between HMRC and Oxford Technology.

If resolution cannot be reached via agreement, the further avenues of review and appeal will thereafter be explored. If it is necessary to pursue the appeal process to the First-tier Tribunal, the likely timescale for such a hearing is in the region of 9 to 14 months from the lodging of the appeal with the Tribunal.

Individuals who have invested in OT1 and OT3 should, as previously indicated, seek their own personal financial advice from their stockbroker, bank manager, solicitor, accountant, fund manager or other independent financial adviser who specialises in advising on the acquisition or disposal of shares in order that they may ascertain the implications associated with the Company losing its VCT approval and take appropriate action.

Further announcements will be made to keep shareholders fully informed of developments.

[timbo003] 15/4/2014 19:31

Some progress to report for the Oxford Technology VCTs Action Group.

Over the last two weeks, the Action Group has written to all shareholders in Oxford Tech VCT and Oxford Tech 3 VCT, inviting them to sign up at the Action Group web page.

This notice was sent out today by email to all shareholders who have registered with the action group

If you are a shareholder in Oxford technology VCT or Oxford techology 3 VCT, you can register here, if you haven't already done so:

[127tolmers] 27/3/2014 15:04

Good to see an appeal properly launched today by Oxford 1 & 3; see RNSs

[timbo003] 21/3/2014 19:04

FT article setting out HMRC position and the possible basis for appeal

[timbo003] 21/3/2014 16:01

Here is an extremely helpful guide (just published) on the implications of withdrawal of VCT status for private investors from the AIC

[edwardt] 21/3/2014 11:34

a question would be how many breaches in the past have occured and not resulted in loss of vct status. i suspect there has been a few and hmrc has seen it as a minor breach and told them to get back in line. this seems draconian...

[timbo003] 21/3/2014 10:48

ShareSoc press release just out on the Oxford Tech VCTs



I would urge any VCT shareholders to get in touch and register with the action group

[127tolmers] 19/3/2014 07:59

ryandj, on a factual note OXT have circulated those shareholders with a registered email address with a copy of the HMRC letter with confirms they were informed by OXT on 23 October. The manager has tried to negotiate with HMRC on just such a rectification basis but was refused.

[ryandj2222] 18/3/2014 21:00

It does seem quite ridiculous that the board did not know of the rules, and worse still that when told about them by Tolmers as mentioned in his letter they ignored it or did not take any action. Why can't they sell down some of the scancell holding now?

My holding is very small, at just £1000 on the second hand market, but I am still interested in any share holder action that may take place.

[127tolmers] 14/3/2014 22:49

Like Timbo I have also written to Kathryn Robertson at HMRC

Dear Kathryn,

I am a serial investor in both new and second hand VCTs as I have an interest in investing in and supporting small growing UK companies. I am writing to you today as a shareholder in both Oxford Technology VCT 1 (OXT) and Oxford Technology VCT 3 (OTT). As you will be aware, both recently had their VCT status revoked as a result of a technical breach of VCT rules.

I purchased shares in OXT and OTT some time ago as I like to support UK based, fast growing technology companies, in which the Oxford Technology VCTs specialise. I bought my shares in the second hand market, so I have no personal exposure to loss of VCT relief or triggering of deferred CGT liability. Of course there will be future tax implications for me personally from the fund losing its VCT status.

I understand that the VCT rule breach came about as the result of OXT and OTT taking up their allocation in the July 2013 share placing in Scancell plc. Subsequently, Scancell represented over 15% of the value of the fund, so the increase in investment was not permitted under prevailing VCT rules. I am quite sure that this breach was unintentional, as I was present during discussions at a Scancell investor meeting (1 October 2013), when a fellow shareholder alerted the Lucius Cary (the OXT and OTT Director and Manager) of a possible breach of the VCT rules after he had mentioned that OXT and OTT had participated in the July placing. He appeared genuinely surprised and shocked by this news. He even suggested that this shareholder ought to be on his board!

The rule regarding the 15% maximum holding was presumably designed to ensure a wide spread of initial investments. OXT and OTT accordingly have invested in 20 or so companies and, as might be expected, some were more successful than others. However an unintended consequence of this rule is that it hinders, rather than helps investment in small growing SMEs.

The rules governing VCTs are complex and have evolved over a number of years, but I suspect the rule concerning the 15% maximum was not originally intended to discourage continued investment support from VCTs, such as OXT and OTT, into promising, fast growing companies such as Scancell after some of their other earlier investments had failed. This is particularly relevant in the current funding environment, where pre revenue, R&D based SMEs, such as Scancell, find it extremely difficult to attract investment through more conventional routes.

I do understand the necessity for rule compliance and that an inadvertent breach of the rules cannot be ignored, but I would hope that a first time, inadvertent technical breach could be more appropriately remedied. For example is it not possible to find a simple solution which would bring the VCT back into compliance by requiring the VCTs to sell the shares incorrectly acquired in the placing.

Leaving aside the rules and complexity of VCT compliance, it does seem somewhat inappropriate to target punishment at individual, blameless OXT and OTT shareholders, who may have much to lose. Many of them, like me, will have been motivated to invest in OXT and OTT because they wished to support UK based, technology start-up companies and many would probably not have invested, if it were not for the VCT tax breaks to compensate for the high risk nature of the investment.

As shareholders we rely on the Board and Manager's statements in their annual report;

Internal control

The directors are responsible for the company's system of internal control. The Board has adopted an internal operating and strategy document for the company. This includes procedures for the selection and approval of investments, the functions of the Investment Manager and exit and dividend strategies. Day to day operations are delegated under agreements with the Investment Manager who has established clearly defined policies and standards. These include procedures for the monitoring and safeguarding of the company's investments and regular reconciliation of investment holdings. This system of internal control, which includes procedures such as physical controls, segregation of duties, authorisation limits and comprehensive financial reporting to the Board, is designed to provide reasonable, but not absolute, assurance against material misstatement or loss. The Board has considered the need for an internal audit function but has decided that the size of the company does not justify it at present. However, it will keep the decision under annual review. The Board has reviewed, with its Investment Manager, the operation and effectiveness of the company's system of internal control for the financial period and the period up to the date of approval of the financial statements.

And later:

Deferred Tax

Deferred tax is not provided on capital gains and losses arising on the revaluation or disposal of investments because the company meets (and intends to continue for the forseeable future to meet) the conditions for approval as a Venture Capital Trust. The HMRC has approved the company as a Venture Capital Trust for the purpose of Section 247 of the Income and Corporation Taxes Act 2007. The approval was given in the financial period ended 28 February 1998 and the company has subsequently directed its affairs so as to enable it to continue to be so approved.

If punitive action does need to be taken, would it not be more appropriate to impose a fine on the Board and Managers and to restore VCT status to both OXT and OTT.

The publicity that this HMRC action has generated in the VCT world will undoubtedly strengthen the internal control processes in all VCTs and I am sure that the Oxford Boards will never let this happen again.

I understand that there is now a one month window for the VCTs to lodge their appeals and I would be grateful if you could ensure this correspondence is taken into consideration during the appeal processes and forward it on to all those concerned with it in HMRC.

I look forward to your reply.

Kind regards,

[timbo003] 14/3/2014 16:41

I have now written to Kathryn Robertson at HMRC asking her to consider my correspondence during the appeal against the ruling:




I suggest other share holders do the same.

[127tolmers] 14/3/2014 08:10

nigelsom, you may like to follow the thread on motleyfool



I think we need to wait for the appeal process to be completed first. I would like to see VCT status restored but a hefty fine on the fund manager.

The shareholders have voted for a 2 man board where one is the fund manager himself and the chairman is the other and 84 years old. This was a car crash waiting to happen.

[nigelsom] 13/3/2014 21:31

Shareholder action time?

Incompetent (and, indeed, one could argue negligent) directors: now they are suggesting that OXT might be closed down. Surely shareholders should have their say as to how that happens: I'd rather have the Scancell shares than see them offloaded at a discount for cash.

The board should be sacked forthwith: they may not have noticed, but running a VCT means knowing and obeying the VCT rules is paramount. Abject failure, then, on that score. If the board had any common decency they would resign immediately without any compensation and hand back any bonuses/share options....and, indeed, salaries received.

And as for the 'miscellaneous' title of the RNS, SHAME ON YOU!!

So, who is up for a shareholder action group?

Could we sue them for loss of tax reliefs?

[ryandj2222] 13/3/2014 10:21

The RNS headline seemed a bit sneaky "Miscellaneous" like they were hiding something

I can't see the appeal working out for them really. Luckily only a small holding. Market makers have knocked the sell price right down to 5p this morning, but no sales so far.

[pugugly] 13/3/2014 09:52

HMRC disaster:- Sorry for all holding.

I hope the directors, or their tax advisors, have neglignce liability insurance.

[127tolmers] 27/1/2014 12:57

SCANCELL COULD BE THE NEXT BIG BENEFICIARY OF THE SPATE OF LICENSING DEALS .......

Matthew Goodman in this week's Sunday Times suggests Scancell could be the next big beneficiary of the spate of licensing deals currently being struck in the super hot area of Cancer Immunotherapy:

"There are likely to be further deals struck as the pharma giants strive to boost their exposure to this rapidly expanding market.

Scancell, an AIM-listed company that is developing melanoma vaccines, is set to begin a search for a bigger partner to help fund late-stage trials of its treatments after publishing encouraging data last month.

"We are looking at 2014 as the year we consummate a relationship or a deal to take this forward," said Richard Goodfellow, Scancell's joint chief executive.

Most drug companies are also looking into how different immunotherapies could work in tandem with existing cancer treatments."


Is this the trigger for the OXT price reversal?

[127tolmers] 12/11/2013 19:47

hxxp://www.theaic.co.uk/aic/find-compare-investment-companies?type=Filter&sort=5sptr&az=&country=®ion=&objective=§or=&manager=

On the AIC list OXT is number 1 over five years and number 7 over one year for total shareholder return of ALL Investment Trusts and VCTs.

[balcony] 11/6/2013 22:16

The 30% share of select may be the new driving force for this share

[edgefund] 20/8/2012 15:39

Talking to yourself, the first sign of going mad...lol

For the record


1 OXT Oxford Tech.Vct share price - 54.50 %Change 81.67% Change 24.50

[hybrasil] 20/8/2012 14:56

I too thought it was strange that there were no posts since 2005