This compares to £429m in the 2014/15 tax year, which was the fifth highest on record. VCT funds under management to 5 April 2016 (£3.6bn) were slightly up on last year (£3.5bn).

The figures come with a caveat, though, according to Tilney Bestinvest’s Jason Hollands.

He said although the figures showed VCT fund raising increasing, this included funds raised in offers launched in the previous tax year that allotted shares in 2014/15 and also the impact dividend reinvestment by existing shareholders.

He said: “When you look more specifically at new VCT top-up and prospectus share offers launched during the 2015/16 tax year, we estimated that funds raised in these totalled £387 million.

“That’s down a little – but only slightly - on the equivalent figure of £399 million for the 2014/15 tax year, which was one of the strongest years in the last decade.”

Despite this, the figures were still remarkable, he said, considering the normal pattern of fund raising was effectively suspended for months last year, as VCT managers digested implications of significant rule changes. This came as the Government was told to bring its tax advantaged venture capital schemes into line with EU red tape.

Ian Sayers, the AIC chief executive, said: “The VCT sector has now seen twenty one years of annual fundraising, so it is no mean achievement that this year marks the third highest on record. It is a real vote of confidence in VCT managers from investors and their advisers and a testimony to how well managers are coping with recent VCT rule changes.

“The pension changes to the lifetime and annual limits have clearly had some impact and this is likely to continue next year with further restrictions for high earners.

“The VCT sector continues to be an important driving force behind the UK’s up and coming businesses, the backbone of the UK economy, and an important catalyst for job creation.”