{"id":2201,"date":"2022-04-13T14:57:05","date_gmt":"2022-04-13T14:57:05","guid":{"rendered":"http:\/\/www.robbtax.co.uk\/blog\/?p=2201"},"modified":"2022-04-13T14:57:30","modified_gmt":"2022-04-13T14:57:30","slug":"generous-tax-incentives-for-investing-in-higher-risk-enterprises","status":"publish","type":"post","link":"https:\/\/www.robbtax.co.uk\/blog\/generous-tax-incentives-for-investing-in-higher-risk-enterprises\/","title":{"rendered":"Generous tax incentives for investing in higher risk enterprises"},"content":{"rendered":"

With the cost of living rising steeply and taxation at its highest level for decades, tax breaks are welcome, particularly for those looking to invest their money in business.<\/p>\n

<\/p>\n

The Enterprise Investment Scheme (EIS) allows a company to raise money from investors to help grow its business. The EIS stipulates that those receiving investment under the scheme must use it to grow their business.<\/p>\n

It was designed to encourage individual investors to buy shares in higher-risk companies by offering generous tax reliefs to those who invest.<\/p>\n

Higher returns potential<\/strong><\/p>\n

Investing in less established businesses may carry greater risk, but there is the potential for higher returns and the tax relief available can minimise any loss should the worst happen.<\/p>\n

Under\u00a0EIS, a business can raise up to \u00a35 million each year, and a maximum of \u00a312 million in the company\u2019s lifetime.<\/p>\n

There are\u00a0different rules for knowledge-intensive companies<\/a>\u00a0that carry out a significant amount of research, development or innovation.\u00a0 It is a complicated area, so it is important to get the correct advice from a tax specialist.<\/p>\n

To be eligible, a business must be within seven years of its first commercial sale, not have gross assets worth more than \u00a315m before shares, and have less than 250 full-time employees.<\/p>\n

Income tax relief<\/strong><\/p>\n

Income tax relief is generous with this scheme and investors can claim relief for a maximum annual investment of \u00a31 million, or \u00a32 million if they have invested in a knowledge-intensive company.<\/p>\n

They can claim for up to 30 per cent of the investment, meaning that they could receive up to \u00a3300,000 tax relief a year \u00ad\u2013 or \u00a3600,000 for investments in knowledge-intensive companies. This is one of the most generous tax relief schemes currently on offer in the UK.<\/p>\n

Protection from losses<\/strong><\/p>\n

The EIS scheme provides attractive loss relief at the investor\u2019s marginal tax rate.<\/p>\n

When this loss relief is combined with the income tax relief received when investing in an EIS eligible company, it greatly reduces the amount of capital at risk.<\/p>\n

Relief with Capital Gains Tax<\/strong><\/p>\n

Returns on most non-EIS investments will be liable for CGT above the CGT-free personal allowance, but providing all conditions are met when investing in an EIS scheme, all growth in value is exempt from CGT. This means investors can achieve a greater net profit, while saving their personal allowance for other investments.<\/p>\n

For help and advice on related matters please contact our expert team.<\/p>\n","protected":false},"excerpt":{"rendered":"

With the cost of living rising steeply and taxation at its highest level for decades, tax breaks are welcome, particularly for those looking to invest their money in business.<\/p>\n","protected":false},"author":1,"featured_media":2203,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,17,8,15],"tags":[],"yoast_head":"\nGenerous tax incentives for investing in higher risk enterprises - Accountants in Sutton Coldfield<\/title>\n<meta name=\"description\" content=\"Robb & Co is an independent firm of chartered accountants and specialist tax advisors based in Sutton Coldfield, West Midlands.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.robbtax.co.uk\/blog\/generous-tax-incentives-for-investing-in-higher-risk-enterprises\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Generous tax incentives for investing in higher risk enterprises - 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