Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS)
Both variations of the Enterprise Investment Scheme are designed to encourage investment into businesses by individuals. It’s important to ensure that you’re fully aware of the restrictions of the scheme, but it can prove to be highly attractive to investors.
Let’s take a look at the two variations:
1. Enterprise Investment Scheme (EIS)
Looking for a way to encourage investors to put their money into your business? The Enterprise Investment Scheme (EIS) is available to businesses at any stage of their life cycle, and provides opportunities for investors to obtain significant tax relief on their investment.
The available reliefs for qualifying businesses are as follows:
- Income tax relief of up to 30% of the sum invested
- Exemption from Capital Gains Tax
- Capital Gains Tax Deferral Relief
- Exemption from Inheritance Tax
- Loss Relief
As with an SEIS scheme, we can handle all of the processes around the EIS scheme, including the pre-approval process and applications:
- Confirm the suitability of the business for the scheme.
- Identify or confirm the available tax savings for potential investors, often positively influencing their decision to invest.
- Completion of the necessary applications and following them through to approval.
- Issuing the final certificates to investors to enable their claim to the tax relief.
In the past we have been highly successful with EIS schemes, in several instances where other firms have advised that the relief would not be available. One scheme in particular raised £850,000. In these situations, we would ordinarily prepare Business Plans, Finance Plans, the EIS application and deal with its submission, following the process through from start to successful conclusion.
If you are considering an EIS scheme, contact us; we’d love to help you get it underway and see the investment help you achieve your business dream!
2. Seed Enterprise Investment Scheme (SEIS)
The Seed Enterprise Investment Scheme (SEIS) helps new businesses, who have not previously traded, to attract investors and encourage growth.
It allows a maximum investment of £150,000 and if it is structured and implemented correctly, can enable the investor to recover MORE than the original investment in tax rebates.
The key here is that the business cannot have traded, so it is essential that the SEIS scheme be carefully considered before trading starts, otherwise any potential savings are lost.
Once agreed and in place, 100% of the investment must be used within twelve months.
As with an EIS scheme, we can handle all of the processes around the SEIS scheme, including the preapproval process and applications:
- Confirm the suitability of the business for the scheme.
- Identify or confirm the available tax savings for potential investors, often positively influencing their decision to invest.
- Completion of the necessary applications and following them through to approval.
- Issuing the final certificates to investors to enable their claim to the tax relief.
If you are a new business, contact us before you start trading; we’d love to help you get an SEIS scheme in place to help your business get off to a flying start!
Related Info
Can I just say we are so pleased that we have moved to Baranov Associates. As we discussed when you visited, we had to find a way to take the stress out of all of the financials and you’re doing that for us! We can see how to use Xero more efficiently and so with us being as on top of it as we can be and with you and Liz we feel a lot more confident about our business being in good shape.
Mrs S James, Sandbanks Capital Partners Limited
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