The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) are programs to help emerging businesses raise money through investment. Both offer tax relief to investors. A May 2019 report by HM Revenue and Customs found the number of companies raising investment for the first time is declining in the case of the EIS, and static for SEIS.
In the 2017 Autumn Budget, the government announced a plan to boost investment over the next decade:
“doubl[e] the annual allowance for people investing in knowledge-intensive companies through the Enterprise Investment Scheme (EIS) and the annual investment those companies can receive through EIS and the Venture Capital Trust scheme, and introduc[e] a new test to reduce the scope for and redirect low-risk investment, together unlocking over £7 billion of growth investment”
In October 2018, the government revealed its plans to reform the EIS. The stated aim was to make investment easier, with a focus on “knowledge-intensive” companies.
Also, in December 2018, the government launched its Industrial Strategy. It restates the commitment to expand the EIS.
The government is encouraging early stage investment by updating the EIS. So this policy is ‘in progress’. But the HMRC report shows no immediate impact so we can’t yet say this has helped “innovators and startups”. We’ll keep tracking for evidence of increased investment levels. Follow this policy for updates.
Invest in the details – it pays off!
- Enterprise Investment Scheme Seed Enterprise Investment Scheme and Social Investment Tax Relief – Gov.uk
- Autumn Budget 2017 – Gov.uk
- Industrial Strategy
- The UK’s Industrial Strategy – Gov.uk
- Treasury reveals EIS reforms – FTAdviser
- The Enterprise Investment Scheme (EIS) explained – StartUps.co.uk
- SEIS investment scheme: how it works – StartUps.co.uk