EIS - Enterprise Investment Scheme
EIS - Enterprise Investment Scheme
The Enterprise Investment Scheme is designed so that your company can raise money to help it grow. It does this by offering tax relief to individual investors who buy new shares in your company. Under EIS, you can receive up to £5 million each year, and a maximum of £12 million in your company’s lifetime. This also includes amounts received from other venture capital schemes. To be eligible you must have been trading for over 4 months and less than 7 years.
There are various rules you must follow so that your investors can claim and keep EIS tax reliefs relating to their shares:
- The investment in your company must be a qualifying investment.
- The shares you issue must be paid up in full when they’re issued and you’ll need to be registered at Companies House.
Your shares for this investment must be full-risk ordinary shares that aren’t redeemable and carry no special rights to your assets or preferential rights to dividends
The money raised by the new share issue must be used for an existing qualifying business activity, which includes preparing to carry out a qualifying trade and research and development that’s expected to lead to a qualifying trade. It must be spent within 2 years of the investment.
For information on non-qualifying trades please see: https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm3010
The Enterprise Investment Scheme is administered in HM Revenue and Customs (HMRC) by the Small Company Enterprise Centre (SCEC) which can give advice on the scheme. They also have a useful guide for companies who wish to raise finance via EIS: https://eisa.org.uk/about-eis/eisa-guides/
Website: https://www.gov.uk/guidance/venture-capital-schemes-apply-for-the-enterprise-investment-scheme
E-mail: enterprise.centre@hmrc.gsi.gov.uk