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    Enterprise Investment Scheme (EIS)

    If you are looking to raise funds to support a new business venture, grow your company or embark on R&D activity, the ‘Enterprise Investment Scheme’ (EIS) or SEIS, the ‘Seed Enterprise Investment Scheme’ which is the equivalent initiative for start ups, is a very useful initiative.

    We can help company owners, investors or an existing management team looking to finance a management buyout (MBO) take advantage of EIS and the tax relief it offers.

    RJP can help you to ensure you have the right company structure in place to obtain EIS approval from HMRC. This will reassure investors that the investment they make will qualify for EIS or SEIS tax reliefs. For some clients, this early stage tax planning enables them to raise funds for research and development, which means the company can also qualify for R&D tax relief in the future.

    Qualifying for the Enterprise Investment Scheme

    If you have an unquoted company and the opportunity exists to attract investment through the EIS you can obtain advance assurance from HMRC that your company qualifies, and this will provide comfort for investors. The company will need to meet certain criteria as follows:

    Company criteria

    • It must be a qualifying trading company or the parent company of a qualifying trading group. Companies dealing in property are not eligible, and certain other types of business are not eligible
    • A minimum of 50% of the qualifying trade must be carried out in the UK and the business must have a permanent establishment in the UK
    • Gross assets must not exceed £15 million before the EIS share issue
    • The company must not have more than 250 employees
    • A maximum of £10million can be raised through EIS in any 12-month period

    Investor criteria

    In order to qualify for income tax and capital gains tax relief, investors must satisfy certain conditions, including the following:

    • Shares must be ordinary with no preferred rights and must be held for at least three years
    • The shareholding must not exceed 30% of the issuing company either alone or when aggregated with associates. This is measured either by share capital, share capital and loan capital combined or voting rights
    • The investor must not be employed by the issuing company, subject to an exception for certain paid directors or if specific conditions for MBO apply

    Qualifying for the Seed Enterprise Investment Scheme (SEIS):

    Criteria for business start-ups

    • The company must have been trading for less than two years or preparing to continue a new business
    • It must have less than 25 employees and own assets of less than £200,000
    • The maximum amount of all SEIS investment together with any other state aid received by the company in a three year period must not exceed £150,000
    • If a start up business needs to secure a larger amount of funding than £150,000 it is possible to combine both SEIS and EIS investments, but the application for EIS cannot be made until 70% of original funds obtained through SEIS have been utilised
    • As with EIS, an investor under the SEIS scheme is not able to own more than 30% of the shares of the company
    • It’s not possible to apply for SEIS if a company has already participated in EIS, but it is possible to apply for EIS following SEIS

    Do you need to raise funds?


    60 Day Deadline for CGT Returns and Tax Payments

    If you sell a property and incur capital gains tax on the transaction, you will need to file a tax return and also pay any tax that is due within 60 days of completion, or penalties will arise. Need help with your property taxes? Talk to us.