The aim of EIS is to help you grow your company by making it easier to raise funds. It does this be offering significant tax relief to investors.
What are the EIS Rules for Businesses?
Your company can raise a maximum of £5 million in total in any 12-month period under EIS (if you raise more, only up to £5 million worth of shares with be eligible for EIS).
Your company must not have more than £15 million of gross assets.
Your company must have fewer than 250 full-time equivalent employees.
You can find out more information on whether your company is EIS eligible here.
What’s the difference between EIS and SEIS?
You may have also heard of SEIS tax relief. The main difference between the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) is that SEIS is focused on earlier-stage (seed stage) companies than EIS.
To be eligible for SEIS, a company must be raising no more than £150,000, whereas to be eligible for EIS a company can be raising up to £5 million. For investors, there are also significant differences in tax relief benefits. You can read our guide to SEIS tax relief over here.
How to Claim EIS Tax Relief
We’ve streamlined the tax documentation process for investors on Seedrs. Your tax certificates are digitally stored in your Seedrs account, where you can easily download electronically when submitting your tax return.
Claims for relief in the current tax year by letting HMRC know, who will then either change your PAYE code or make an adjustment on your Self Assessment on account that’s due. You can find out more about this process here.
Claims for losses and for relief for those losses must be made through the tax return and the time limit is the following 31 January, one year after the end of the tax year of the loss. This is 12 months after the deadline for submitting the tax return for that year.
Seedrs has also partnered with SimpleTax to offer Seedrs investors online tax returns at 50% off the regular price, at only £18 using discount code SEEDRS18.
Alternatively, just pass on the relevant details to your tax advisor. Please note that Seedrs is not authorised to give tax advice.
It’s also easy on Seedrs to see which companies qualify for investment under the EIS – just look for the EIS badge on the Investment Opportunities pages on Seedrs.
We hope that you found this overview useful, but tax relief is a complicated subject and what applies to you will depend on your individual circumstances, so please be sure to get independent tax advice.
Finding EIS investment opportunities
Explore EIS eligible companies currently raising funds on Seedrs. Remember that when investing, your capital is at risk.
You can also use our AutoInvest tool to easily build a portfolio of EIS investments in a diverse range of businesses. Learn more here.
You can also find more information on EIS on the HMRC website here
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