By How do I invest in EIS?
There are two ways to invest in EIS: by investing directly in a single EIS-qualifying company or by investing through a fund manager that builds up a portfolio for you. Both options could have a place in an experienced investor’s portfolio.
Can a company invest in EIS?
Limited companies can also invest in EIS eligible companies if they wish, however the company entity is unable to receive any tax relief benefits such as corporation tax relief. Tax relief is only available to individuals.
What is EIS in the UK?
The Enterprise Investment Scheme (EIS) is a UK government scheme that helps younger, higher-risk businesses raise finance by offering generous tax reliefs to investors. The scheme has been around since 1994, so is a well-established part of the UK tax landscape for investors.
Which companies are eligible for EIS?
Qualifying companies
- Have gross assets of less than £15m, and no more than £16m immediately after the share issue.
- Have fewer than 250 ‘full time equivalent’ employees.
- Be unquoted or on AIM or NEX Growth, and have no arrangements in place to become quoted on a recognised stock exchange.
Are EIS a good investment?
The tax reliefs available via EIS are some of the most generous for investing into high-growth, early-stage businesses. If you’re an experienced investor or high earner, you may feel that your capital is being eroded, as cuts to pension allowances and some forms of tax relief have been introduced over the years.
What is the maximum EIS investment?
Under EIS , you can raise 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. You must follow the scheme rules so that your investors can claim and keep EIS tax reliefs relating to their shares.
Who is not eligible for EIS?
You are not covered if you belong to any of these categories: domestic workers, self-employed, civil servants, and workers in local authorities and statutory bodies. In addition, workers aged 57 and above who have never paid contributions before that age are also exempted.
How many years can you carry back EIS relief?
When to claim your relief If you invest with EIS , SEIS or SITR , you can claim relief up to 5 years after the 31 January following the tax year in which you made the investment. For VCTs , you can claim relief up to 4 years after the end of tax year of assessment in which you made the investment.
How does EIS tax relief work?
Investors can claim up to 30% income tax relief on EIS investments, which gives an incentive for some of the risk normally associated with funding small companies. Investors in unapproved EIS funds can choose to treat an investment as if it was made in the previous tax year, which can be useful for tax planning.
What happens if an EIS company goes bust?
– If the EIS company goes into liquidation within (generally) three years of the share issue, Income Tax relief originally given is clawed back. The amount clawed back is 30% of any value received on liquidation (up to a maximum of the relief originally given).
Is it compulsory to pay EIS?
All employers in the private sector are required to pay monthly contributions for each of their employees. All employees aged 18 to 60 are required to contribute. However, employees aged 57 and above who have no prior contributions before the age of 57 are exempted.
Who is eligible for EIS relief?
To qualify for this relief, income tax relief must have already been claimed – and not withdrawn by HMRC. Also, investors have to hold the shares for at least three years, and the company must remain EIS-qualifying for at least three years.
Are there any EIS funds in the UK?
Through RLC Ventures funds, investors are able to access the opportunity to invest in the most exciting and fast growing technology companies in the UK. All investments made will fall under the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) ensuring investors can qualify for a range of tax reliefs.
What are the EIS and Seis in the UK?
The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) are two of a number of UK government initiatives which encourage innovation by granting private investors a significant tax break when investing in early stage, ‘high-risk’ companies.
How does the Enterprise Investment Scheme ( EIS ) work?
The Enterprise Investment Scheme ( EIS) is one of 4 venture capital schemes – check which is appropriate for you. EIS is designed so that your company can raise money to help grow your business. It does this by offering tax reliefs to individual investors who buy new shares in your company.
What’s the maximum amount a company can invest in EIS?
Companies can get up to £5 million in EIS investment per year, up to a maximum of £12 million in the company’s lifetime. This limit includes investment received under other venture capital schemes.