The taxman's decision to take away venture capital trust status from Oxford Technology will be reviewed – meaning the status is reinstated for the time being at least.
The Association of Investment Companies said it was the first time HMRC had withdrawn the status of a VCT when it made the move in March.
Following pleas from the firm, the HMRC's original decision is to be "set aside" while it is reexamined.
At the time of the announcement about Oxford Technology VCT Plc and Oxford Technology 3 VCT Plc the company admitted making an inadvertent breach, which it had told HMRC about.
The firm said it had exceeded the maximum threshold of 15 per cent that a VCT fund can invest in any one company.
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The withdrawal of VCT status meant the tax advantages of approval for the company and its investors would no longer apply.
In March Ian Sayers, director general of the Association of Investment Companies, said: "This is a very worrying time for investors in these two VCTs."
In a statement to the stock exchange following legal representation to HMRC, Oxford Technology said: "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"The effect of this is that the VCT status of OT1 and OT3 is, at the moment, to be treated as not having been withdrawn so that shareholders need not take any steps in relation to this matter.
"If, in the light of the further representations HMRC decide that VCT approval should not be withdrawn then that will conclude the matter so far as the shareholders' tax position is concerned.
"If, on the other hand, HMRC decide that such approval should be withdrawn, then shareholders will be notified accordingly and will need to consider what steps they should take."