In this paper we present the results from a study of the role that tax incentives play in business owners' decisions on capital investment and research and development (R&D) expenditure. We use semistructured interviews with fifteen business owners and directors and five financial advisers to establish the extent to which tax incentives are considered in capital and R&D investment decisions, and to identify obstacles that might prevent UK capital allowances and R&D tax policies from achieving their goals. First, we investigate whether incentives are sufficient to encourage investment and whether the costs of accessing the incentives faced by similar firms limit the potential benefits of the policy. Second, we explore the stage in the process of investment decision making at which tax issues are considered and the degree of importance attached to tax incentives. For example, is the tax treatment integral to the decision-making process or only a ‘final consideration’ at the end? Third, we investigate the impact of uncertainty on the tax incentives, since this can be an important aspect of investment decisions, and may diminish the effectiveness of policy. It is not clear whether the incentives offered are effective in generating additional investment and in helping financially constrained firms. Under uncertainty the incentives need to be substantial to influence the decision to invest. Effective policy should assist firms who would otherwise struggle to realise their business plans.
Venture Capital Investment Selection Decision-making Base on Fuzzy Theory