play_circle_filled In progress

Economy Economy

Help innovators and startups

Last updated: 12:31pm 25 July 2019

We will help innovators and startups, by encouraging early stage investment and considering further incentives under our world-leading Enterprise Investment Scheme and Seed Enterprise Investment Scheme.

Conservative Party Manifesto 2017, p.77

Our verdict

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!

There's always room for debate

We’re serious about providing clear, up-to-date, non-partisan information. We focus on being consistent and fair in how we reach our verdicts, and always explain our reasoning. But there is always room for debate. So if you see it differently, we’d love you to tell us why. Or even better, submit an edit.