Organisation to Promote Tax Based Investments meets with Politicians
The Enterprise Investment Scheme Association (EISA) is to meet with key politicians at an All Party Parliamentary Group event on 3 March to discuss the importance of tax incentive schemes for investors supporting start-ups and early stage growth businesses.
In a report prepared for the MPs, the EISA highlight four key areas for attention:
• Increasing the amount individuals can invest, and ensuring the schemes continue.
“We believe that increasing the threshold for EIS and SEIS investment, and potentially removing it all together, will encourage follow-on investments, and could help smooth the transition into non-tax-incentivised investments. Additionally, we need a commitment from the Government that the schemes will continue beyond 2025,” says Mark Brownridge, Director General of the EISA.
• Improving the user journey, with a belief that there is a compelling case for improving the administrative processes around authorising SEIS and EIS companies and granting tax relief for investors. The scheme rules are currently complex and need simplifying.
• Raising the profile of the advantages of the EIS scheme. “Only about 10% of those earning in excess of £100,000 each year make use of the scheme, and much more can be done to raise the profile of EIS and SEIS both to companies seeking much needed equity finance including involving a far wider range of business support agencies such as LEPs, Universities and the IOD and to potential investors,” claims Lord Flight, Chairman of the EISA, and host for the event.
• Britain should seek via negotiation with the EU to loosen the EU State Aid and Risk Finance Guidelines limits as soon as practically possible to allow both for an increase in the levels of investment as well as liberalising the legislation thereby ending restrictions on investment, allowing faster deployment of capital and less administrative burden.
With over £20billion having been invested both into the Seed Enterprise Investment Scheme, where the investment carries a 50% tax benefit, and the Enterprise Investment Scheme, with a 30% tax advantage, since the schemes were introduced 25 years ago, 27,000 small companies have been supported by private investors.
The politicians attending the event will be briefed on the importance of the schemes, how they operate, and the extent to which they can be improved to encourage more individuals and companies to take advantage of them with the objective of contributing to the UK growth agenda.
Notes to Editors:
Full copies of the report are available from Mark Brownridge at mark.brownridge@eisa.org.uk, or on 07502467104
The event will take place at the House of Commons on the 3rd March