HMRC have released statistics showing a general decrease in the number and amount of investments made under the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), Social Investment Tax Relief (SITR) scheme and Venture Capital Trust (VCT) scheme.
EIS, SEIS, SITR and VCTs provide financing methods while giving investors tax incentives through Income Tax and Capital Gains Tax (CGT) reliefs.
Statistics released by HMRC include the first estimates of funds raised in the 2022-23 tax year and information about advance assurance requests for 2023-24.
For both EIS and SEIS, most funds were raised by companies in the information and communication sector. Manufacturing, professional, scientific and technical industries also featured heavily.
Enterprise Investment Scheme
- Since the EIS was launched in 1994, approximately £30 billion has been raised by 37,445 companies.
- In 2022-23, 4,205 companies raised £1.957 billion.
- This is a slight decrease compared to 2021-22, with funding down 15%. This is likely to be due to the increase in interest rates. In 2021-22, 4,455 companies raised £2.297 billion.
- Of the 4,205 companies raising funds in 2022-23, 435 were Knowledge-Intensive Companies (KICs).
- 65% of EIS investment in 2022-23 was received by companies registered in London and the South East.
- 1,280 companies raised EIS funds for the first time in 2022-23. This is a drop from 2021-22 (1,770 companies), likely due to the introduction of the Risk-to-capital condition.
- Since 2006, 47,270 EIS Advance assurance requests have been made. Of these, 38,060 (81%) have been approved.
- 2023-24 saw 3,130 advance assurance requests, of which 73% (2,290) have been approved.
- For 2022-23, 81% (2,960) of advance assurance requests were approved.
- 40,485 investors claimed EIS Income Tax relief on their 2022-23 tax returns, down from 44,810 the previous year.
Seed Enterprise Investment Scheme
- SEIS was launched in 2012. Since then approximately £1.9 billion has been raised by 18,800 companies.
- 1,815 companies raised a total of £157 million in 2022-23.
- This decreased from £207 million raised by 2,295 companies in 2021-22.
- In 2022-23, 1,440 of the 1,815 companies were raising SEIS capital for the first time, totalling £137 million.
- Like EIS, the largest proportion of investment was raised by companies registered in London and the South East at 65% of all SEIS investment.
- 33,650 advance assurance requests have been made since 2012 with 27,240 (81%) approved.
- 80% (2,180) of the 2,725 requests received in 2023-24 were approved.
- 2,320 (82%) requests were approved in 2022-23, of the 2,835 received.
- In 2022-23, 8,065 investors claimed SEIS Income Tax relief on their tax returns, down from 9,900 in 2021-22.
- 55% of investors claimed relief on investments of £10,000 or less.
Social Investment Tax Relief (SITR)
- Since SITR was launched in 2014, a total of £30.7 million has been raised by social enterprises.
- 40 social enterprises raised funds under the scheme in 2022-23, totalling £5.9 million. This is an increase on 2021-22 when £5.5 million was raised by 40 enterprises.
SITR was closed for new investment from April 2023, meaning that 2022-23 was the last year enterprises could raise investment using the relief.
Venture Capital Trusts
- In 2022-23, VCTs issued shares with a value of £1 billion, down from £1.1 billion in 2021-22.
- The number of VCTs raising funds in 2022-23 decreased to 44 (2021-22: 45) with the number of VCTs managing funds decreasing to 48 (2021-22: 52).
- 26,260 investors claimed Income Tax relief in 2022-23, a 1% increase on the previous year. This relief totalled £985 million, decreasing by 6% on the previous year.
Useful guides on this topic
EIS: Enterprise Investment Scheme (Subscriber guide)
When can EIS relief be claimed? What are the conditions for EIS relief? What are the benefits of EIS relief?
SEIS: Seed Enterprise Investment Scheme (subscribers)
When can SEIS relief be claimed? What are the conditions for SEIS relief? What are the benefits of SEIS relief?
Social Investment Tax Relief
What is SITR? What are the qualifying conditions for SITR? What relief is available? How is it different to Community Investment Tax Relief (CITR)?
Venture Capital Trusts (VCTs)
A Venture Capital Trust (VCT) is a company approved by HMRC that invests in or lends money to, unlisted companies. Individuals may invest in a VCT: this may spread investment risk, as opposed to making a direct investment in an unlisted company.
EIS or SEIS: Advance assurance from HMRC
HMRC offers an advance assurance application service for both the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). How do I apply? What information is needed?
Risk-to-capital: EIS, SEIS and VCTs
What is the risk to capital condition for SEIS, EIS or VCT companies? What steps can you take to meet it? Examples of risk to capital.
Knowledge-Intensive Companies
What are the conditions for investing in EIS Knowledge-Intensive Companies (KICs), what qualifies and how can it benefit investors?
External links
