The Enterprise Investment Scheme (EIS) is a UK government initiative designed to help companies raise up to £5 million per year (up to £12 million in total). By offering tax-efficient benefits to investors, EIS makes your business more attractive to potential backers while providing you with much-needed funding to scale.
How Does EIS Work?
EIS incentivises investors by offering:
- 30% Income Tax Relief on investments up to £1 million (or £2 million for knowledge-intensive companies).
- Capital Gains Tax (CGT) exemption for shares held for 3+ years.
- Loss Relief if the business doesn’t succeed.
Qualifying Criteria for Businesses
To qualify, your business must:
- Be based in the UK and carry out a qualifying trade.
- Have been trading for less than 7 years (or 10 years for knowledge-intensive companies).
- Have fewer than 250 employees (500 for knowledge-intensive companies).
- Hold gross assets of no more than £15 million.
FAQs About EIS
Q: How much can I raise through EIS?
A: Up to £5 million annually and a total of £12 million during your business’s lifetime.
Q: What are the investor benefits?
A: Investors get 30% Income Tax Relief, CGT exemption, and Loss Relief, making EIS a highly tax-efficient opportunity.
Q: How do I apply?
A: Submit an Advance Assurance application to HMRC, ensuring your business meets all EIS requirements. Once approved, you can issue EIS-compliant shares to investors.
EIS is a powerful tool to unlock substantial funding while attracting long-term investors. Contact us to guide you through the EIS application process and help your business grow!
The Tax Lead Limited | 020 3376 0933 | info@thetaxlead.co.uk