{"id":4688,"date":"2022-05-11T15:13:31","date_gmt":"2022-05-11T15:13:31","guid":{"rendered":"https:\/\/www.bainesjewitt.co.uk\/blog\/?p=4688"},"modified":"2022-05-11T15:13:36","modified_gmt":"2022-05-11T15:13:36","slug":"enterprise-investment-rebounds-strongly-after-being-hit-by-pandemic","status":"publish","type":"post","link":"https:\/\/www.bainesjewitt.co.uk\/blog\/enterprise-investment-rebounds-strongly-after-being-hit-by-pandemic\/","title":{"rendered":"Enterprise investment rebounds strongly after being hit by pandemic"},"content":{"rendered":"<p>There has been a fall in investment of around 12 per cent in the Enterprise Investment Scheme (EIS), largely caused by the effects of the pandemic.<\/p>\n<p><!--more--><\/p>\n<p>But that figure was slightly offset by a surge in the sister programme, the Seed Enterprise Investment Scheme (SEIS), which showed an increase of four per cent.<\/p>\n<p>According to HM Revenue &amp; Customs (HMRC), money invested through the EIS, which helps newer firms to find funds to scale up operations, decreased by that figure in the 2020\/21 tax year.<\/p>\n<p>The figures reveal that 3,755 companies raised funds under the scheme, which was 11 per cent down on the previous tax year.<\/p>\n<p>The figures confirm a slowdown over the first three quarters of 20\/21 tax year, which was the height of the pandemic.<\/p>\n<p>The trend was reversed however, in the last quarter of the tax year, where it rebounded back to pre-pandemic levels. The upward trend is expected to continue as awareness and opportunities to access EIS funding increases.<\/p>\n<p>Better news was the money invested through SEIS, which invests in earlier stage start-ups, was up four per cent, increasing to \u00a3175 million across 2,065 companies.<\/p>\n<p><strong>How does the EIS scheme work?<\/strong><\/p>\n<p>Under\u00a0EIS, you can raise up to \u00a35 million each year, and a maximum of \u00a312 million in your company\u2019s lifetime.<\/p>\n<p>This also includes amounts received from other venture capital schemes. Your company must receive investment under a venture capital scheme within seven years of its first commercial sale.<\/p>\n<p>The scheme rules must be followed so that investors can claim and keep\u00a0EIS\u00a0tax reliefs relating to their shares.<\/p>\n<p>Tax reliefs will be withheld or withdrawn from investors if the rules are not followed for at least three years after the investment is made.<\/p>\n<p>There are\u00a0different rules for companies\u00a0that carry out a significant amount of research, development or innovation, and either:<\/p>\n<ul>\n<li>Want to raise more than \u00a312 million in the company\u2019s lifetime<\/li>\n<li>Did not receive investment under a venture capital scheme within 7 years of their first commercial sale.<\/li>\n<\/ul>\n<p><strong>What is the difference with SEIS?<\/strong><\/p>\n<p>The\u00a0Seed Enterprise Investment Scheme\u00a0(SEIS) is a scheme designed to complement the\u00a0EIS.<\/p>\n<p>It helps companies raise money when it\u2019s starting to trade. It does this by\u00a0offering tax reliefs to individual investors\u00a0who buy new shares in your company.<\/p>\n<p>Firms can receive a maximum of \u00a3150,000 through\u00a0SEIS\u00a0investments.<\/p>\n<p>However,\u00a0because firms of this kind are riskier, there are two important differences:<\/p>\n<ul>\n<li>You get a greater income tax break with SEIS than with EIS<\/li>\n<li>With SEIS capital gains are not deferred: you can halve the capital gains tax you owe.<\/li>\n<\/ul>\n<p><strong>What kind of companies qualify for SEIS?<\/strong><\/p>\n<p>To be SEIS-qualifying, a firm must be small and unquoted, have traded for a maximum of two years, have gross assets of less than \u00a3200,000 and fewer than 25 employees at the time of investment.<\/p>\n<p>As with EIS, some companies and sectors are excluded, including those dealing in land, commodities, or shares.<\/p>\n<p><strong>For help and advice on related matters please contact our expert team.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>There has been a fall in investment of around 12 per cent in the Enterprise Investment Scheme (EIS), largely caused by the effects of the pandemic.<\/p>\n","protected":false},"author":2,"featured_media":4690,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,30,31],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/4688"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=4688"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/4688\/revisions"}],"predecessor-version":[{"id":4689,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/4688\/revisions\/4689"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media\/4690"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=4688"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=4688"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=4688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}