You have the potential to claim 30% income tax relief on investments up to £1 million in the current or previous tax year, or up to £2 million if at least £1 million is in knowledge intensive companies (subject to income tax). If you have reached the lifetime limit on your pension fund, or you have used up your annual pension fund and ISA allowances in a tax year, then investing in an EIS fund can be a tax-efficient way to supplement these other long-term investments. ** Enterprise investment scheme association (EISA). The EIS remains popular, with the statistics showing that in the 2018/19 tax year a total of £1,824 million** of funds were raised under the EIS. There’s no guarantee it will become the next unicorn (a privately held start-up company valued at over $1 billion) or even succeed at all, so there is always the risk of potential loss. However, an early-stage company is a high-risk proposition. EIS funds help plug this funding gap and give investors attractive tax reliefs. In the early stages of their development many small companies struggle to secure finance through traditional avenues such as banks. SMEs make up approximately 99% of all privately-owned UK businesses, employing around 16.6 million people*. EIS investment vehicles can be a great way to support the growth of these companies and, in turn, the UK economy. The Enterprise Investment Scheme (EIS) was introduced by the government in 1994 to encourage the funding of small-medium enterprises (SMEs) by offering attractive tax advantages for investors.
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