There has been a fall in investment of around 12 per cent in the Enterprise Investment Scheme (EIS), largely caused by the effects of the pandemic.<\/p>\n
<\/p>\n
But that figure was slightly offset by a surge in the sister programme, the Seed Enterprise Investment Scheme (SEIS), which showed an increase of four per cent.<\/p>\n
According to HM Revenue & Customs (HMRC), money invested through the EIS, which helps newer firms to find funds to scale up operations, decreased by that figure in the 2020\/21 tax year.<\/p>\n
The figures reveal that 3,755 companies raised funds under the scheme, which was 11 per cent down on the previous tax year.<\/p>\n
The figures confirm a slowdown over the first three quarters of 20\/21 tax year, which was the height of the pandemic.<\/p>\n
The trend was reversed however, in the last quarter of the tax year, where it rebounded back to pre-pandemic levels. The upward trend is expected to continue as awareness and opportunities to access EIS funding increases.<\/p>\n
Better news was the money invested through SEIS, which invests in earlier stage start-ups, was up four per cent, increasing to \u00a3175 million across 2,065 companies.<\/p>\n
How does the EIS scheme work?<\/strong><\/p>\n Under\u00a0EIS, you can raise up to \u00a35 million each year, and a maximum of \u00a312 million in your company\u2019s lifetime.<\/p>\n This also includes amounts received from other venture capital schemes. Your company must receive investment under a venture capital scheme within seven years of its first commercial sale.<\/p>\n The scheme rules must be followed so that investors can claim and keep\u00a0EIS\u00a0tax reliefs relating to their shares.<\/p>\n Tax reliefs will be withheld or withdrawn from investors if the rules are not followed for at least three years after the investment is made.<\/p>\n There are\u00a0different rules for companies\u00a0that carry out a significant amount of research, development or innovation, and either:<\/p>\n What is the difference with SEIS?<\/strong><\/p>\n The\u00a0Seed Enterprise Investment Scheme\u00a0(SEIS) is a scheme designed to complement the\u00a0EIS.<\/p>\n It helps companies raise money when it\u2019s starting to trade. It does this by\u00a0offering tax reliefs to individual investors\u00a0who buy new shares in your company.<\/p>\n Firms can receive a maximum of \u00a3150,000 through\u00a0SEIS\u00a0investments.<\/p>\n However,\u00a0because firms of this kind are riskier, there are two important differences:<\/p>\n What kind of companies qualify for SEIS?<\/strong><\/p>\n To be SEIS-qualifying, a firm must be small and unquoted, have traded for a maximum of two years, have gross assets of less than \u00a3200,000 and fewer than 25 employees at the time of investment.<\/p>\n As with EIS, some companies and sectors are excluded, including those dealing in land, commodities, or shares.<\/p>\n For help and advice on related matters please contact our expert team.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" There has been a fall in investment of around 12 per cent in the Enterprise Investment Scheme (EIS), largely caused by the effects of the pandemic.<\/p>\n","protected":false},"author":1,"featured_media":2215,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,20,17],"tags":[],"yoast_head":"\n\n
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