Enterprise Investment Scheme (EIS) support

The Enterprise Investment Scheme is a government initiative that offers tax relief to investors purchasing shares in smaller companies that have been deemed high risk. Companies can apply for EIS assurance to allow investors to access this relief; they must follow certain rules in order to stay qualified. For help with applying for and navigating EIS, it is a good idea to work with an accountant.

The EIS is widely known to be one of the UK’s best investment schemes, offering immediate relief to investors and loss relief if things don’t work out. Small companies can raise up to £5million each year and £12 million in their lifetime.

An EIS Scheme offers tax reliefs to individual investors who buy new shares in a small company. The money raised must be used for a business activity and must be spent within two years. Accountants such as Sleek can offer tailored, in-depth advice to companies looking to use the EIS scheme.

Companies that can join the EIS scheme and offer relief to investors must be based in the UK and have less than 250 employees. They must not have gross assets worth more than £15 million before any shares are issued and and not have more than £16 million immediately afterwards. To be eligible, they cannot be controlled by another company. Sleek can streamline the process of applying for EIS and help companies to stick to the rules once accepted.

Investors can get EIS relief at the rate of 30% on the aggregate of the amounts claimed; this relief is available for the tax year in which the shares are issued, and relief on investments up to £1million per year can be claimed. For more support with EIS relief, it is best to speak to a financial advisor.

You can invest up to £1 million per tax year in EIS or £2 million, providing anything above £1 million is in ‘knowledge intensive’ investments. These are companies that are carrying out research, development or innovation at the time that they are issuing shares. To find out more about EIS investment, speak to a financial advisor.

In order to get tax relief, you need to hold EIS shares for a minimum of 3 years. You can claim relief before this, however. For more support with EIS relief, it is best to speak to a financial advisor.

No Capital Gains Tax is payable on any profits made on an EIS investment at the point of disposal. To find out more about EIS investment, speak to a financial advisor.