Overview

Industry trend watchers are reporting that investors are looking for tax-efficient ways to invest in early-stage enterprises (particularly digital opportunities) which is repositioning the spotlight back on schemes like the Enterprise Investment Scheme (EIS).

Statistics suggest early stage equities grew by a compound annual rate of 33% between 2011 and 2016, whilst by comparison the London Stock Exchange for the main market companies increased by only 5%. If you’re a small - medium-sized business now is the time to make yourself more investible for those eager to reap the benefits of EIS.

What is EIS?

The Enterprise Investment Scheme (EIS) provides tax incentives in the form of a variety of income tax and capital gains tax (CGT) reliefs to investors who invest in smaller, unquoted, trading companies. 

The scheme entitles companies to raise up to £12m or £5m per year. This cap is raised to £20m if the company is considered “knowledge intensive”.

Every day we’re helping more and more start-ups gain EIS assurance and clearance. We’ve even designed a process with templates and industry knowledge that works - so you gain clearance seamlessly.

EIS Eligibility -  to be eligible, a company must:

  • Have less than 7 years trading history
  • Have less than 250 employees for EIS
  • Have no more than £15m in assets for EIS
  • Not be quoted on a recognised exchange
  • Not be controlled
  • Have a UK permanent establishment

What does the investor get?

  • 30% income tax reducer for the current year and previous tax year
  • 100% capital gains deferral if they roll previous gains into an EIS company from prior investments
  • 0% capital gains tax on any rise in market value of their shares
  • 50% extra loss relief on the capital at risk if the company fails
  • 100% inheritance tax relief

How is EIS different to SEIS?

The EIS is essentially the big brother of the SEIS. EIS is designed for small and medium-sized businesses and comes with Income Tax relief of 30% against the amount invested.

Start-ups on the SEIS are entitled to receive a maximum of £150,000, whereas an EIS investor can invest up to the maximum annual investment of £1m per tax year. An EIS company also has a higher lifetime cap of £12m or £20m if the company is "knowledge intensive". You can read more about the differences between EIS and SEIS and get some extra handy tips on our blog

EIS clearance process

Companies looking to apply need to complete an advance assurance application known as the SEIS/EIS (AA) and then follow this up by completing an EIS1 form. Here at The Accountancy Cloud, we know how to guide you through the process, and will continue to support you, beyond your fundraising efforts, to ensure you stay EIS compliant. 

For more information visit our blog where we’ll strive to keep you up to date on all the recent developments in EIS.


The Core

Advanced Assurance Applications

Advanced Assurance Applications

SEIS and EIS Forms

SEIS and EIS Forms

Tax Advisory

Tax Advisory

Helpdesk Support

Helpdesk Support

Investor Certificates

Investor Certificates

Bolt Ons

Cashflow Forecasts for HMRC

Cashflow Forecasts for HMRC

Capitalisation Tables

Capitalisation Tables

Company Secretarial

Company Secretarial

Articles of Association Amendments

Articles of Association Amendments

Our bespoke pricing model takes into consideration the size and complexity of your business - such as the number of employees you have, the number of bank accounts you use, and the volume of transactions that go through your accounts each month.

Looking for a quote, or not sure what you need?

To discuss your business with us, simply get in touch to arrange a convenient time to chat. We can also offer bespoke extras and additional bolt-ons to fit your specific needs, speak with the team to find out more

Wesley Rashid

CEO

Christopher Lee

Senior Tax Advisor

Steve Hanlon

Tax Partner