UK Chancellor George Osborne is said to be mulling a change in the rules to bolster investment by the venture capital industry in the UK. According to a report on The Telegraph, Osborne is said to be considering a modification of the regulations on Enterprise Investment Schemes or EIS, which will enable investors who will provide financing under the program to get immediate tax relief. The current scheme requires investors to wait until an EIS vehicle has completed all of its investments before they can apply for income tax relief.

The EIS was established in 1994 to get investors to pour money in small, unquoted firms, the report said. It is currently geared towards individual investors instead of venture capital funds. However, the proposed amendments would welcome investments from funds, allowing them to maximize their investments in EIS vehicles. As a result, the total investments in small firms would increase.

The report added that changes to the EIS rules may be made known in his Autumn Statement this Thursday. However, it may slip until the 2014 budget, the report added.

According to The Telegraph report, the government has long been supportive of the idea and has been trying to get industry bodies to support the idea as well. The proposed changes would not also be a first for Osborne. He has already raised the amount that an individual firm can raise in a year under the EIS scheme to GBP 5 million from GBP 2 million, the report said.

Meanwhile, members of the industry are also striving to put together a standard term sheet for EIS investors. This will assure angel investors that they will also be getting a similar deal when they invest together with venture capital companies, The Telegraph said. The report added that the changes were said to have come from a panel of leading venture capitalists in the city who were chosen to advise Prime Minister David Cameron  on the matter.