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Whether you’re looking to invest in a small business or you’re a small business owner, you may have heard of the Enterprise Investment Scheme. But If you’re wondering ‘What is EIS’, read on!
The Enterprise Investment Scheme (or EIS) is an incentive set up by the UK government to encourage individuals to invest in small businesses.
Under EIS, a company can raise up to £5 million a year, and £12 million in the company’s lifetime (unless it’s a knowledge intensive company).
Not all companies can use the EIS scheme, (sorry ASOS!) – there are a few requirements to receive investment:
HMRC offers a service that lets you know whether an investment will meet the conditions of the EIS. This is called advance assurance.
The EIS is beneficial for both small companies and investors. For small businesses, the EIS can:
Bear in mind, the money must be spent within two years on qualifying business activities, this includes:
This doesn’t include buying all or part of another business.
Investors can make great profit from investing in companies altogether, but the EIS in particular provides great benefits in the form of EIS tax reliefs:
🚨 FYI: Shares must be sold 3 years or after and you must have claimed some Income Tax Relief to qualify for the Capital Gains Tax Exemptions. 🚨
Investing in EIS companies can be a great opportunity for individual investors. If you want to get started investing in EIS companies, you can easily find the eligible companies using these sites:
The maximum amount you can invest is £1,000,000.
If you’re not 100% sold on the EIS, that’s ok! Back in 1994, the UK government set up multiple investment schemes to help support the growth of small businesses, and the EIS is just one of those schemes.
The others are:
All four schemes are authorised and regulated by the financial conduct authority.
You bet we can!
Here at TaxScouts, our accountants can file your self assessment tax return in as little as 48 hours – EIS tax reliefs included!
Once you’ve provided us with the relevant information, we will apply for all the tax reliefs you are entitled to! This comes at a flat rate of just £149 – find out more here.
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