The Treasury wants the amount invested in a VCT to be capped at £2m in any 12-month period and was due to implement this change on 6 April.

The change would have also affected enterprise investment schemes and seed enterprise investment schemes.

The details had previously been confirmed in the Finance Bill which was published on 29 March but the Association of Investment Companies told the Treasury it was concerned the VCT sector would not have time to adapt its processes by the deadline.

The Treasury has since postponed the changes until the summer.

Ian Sayers, director general of the AIC, said: “The Treasury has quickly recognised that introducing these rules at short notice would have created problems for VCTs seeking to invest in small businesses in the next few months. It agreed this would be unhelpful at a time when UK SMEs are struggling to find reliable sources of funds.

Mr Sayers also said the limit could be increased from £2m to £5m.

He said: “The limit itself is also currently under review and the Government is pushing for it to be raised to £5m. Such an increase is dependent on the approval of the European Commission. These negotiations are, by their nature, complicated and time- consuming.

“Nevertheless, we are confident the Government is committed to this process and we very much hope this increase can be achieved. Increasing the limit would provide additional support to small businesses.”