The generous tax reliefs offered by the Enterprise Investment Scheme (EIS) – including the opportunity to claim back up to 30% of the value of your investment – often offset the higher risks associated with investing into unlisted, early-stage businesses, reducing the total exposure while maximising potential upside.
Growth Capital Ventures’ (GCV) private investor network, G-Ventures, brings a selection of high-quality, EIS-eligible investment opportunities together in one place.
This gives investors the opportunity to invest into high-growth startups – with a focus on tech startups, which are more important than ever and will play a key role in the UK’s post-COVID recovery – while minimising risk and potentially maximising returns with the EIS.
Below is a step-by-step guide to claiming tax relief after investing into an EIS-eligible business.
Important note: The following is not tax advice. Tax rules change and benefits depend on circumstances. You can find HMRC’s full guidance on the subject here, or speak to an accountant if in doubt.
What you need to claim EIS tax reliefs
After you have invested into an EIS-eligible business, you will receive a share certificate and an EIS3 certificate.
Your share certificate confirms your investment into the company, proving you are a shareholder. You will usually receive this before your EIS3 certificate.
Your EIS3 certificate contains information you will need in order to claim your tax reliefs, including:
- The name of the company you have invested in
- The amount you have invested and on which you can claim tax relief
- The date the shares were issued
- The Unique Investment Reference (UIR) number
- The name and reference of the relevant HMRC office
Claiming EIS tax relief on your paper tax return
If you submit a paper tax return, you will need to complete the additional information (SA101) sheet.
In box two, entitled ‘subscriptions for shares under the Enterprise Investment Scheme – the amount on which relief is claimed’, of the ‘other tax reliefs’ section on page Ai 2, you will need to enter the total amount you invested into EIS-eligible companies for which you will claim tax relief.
The maximum amount on which relief can be claimed is £2 million, but any amount over £1 million must be for shares issued by one or more knowledge-intensive companies.
In box 19, entitled ‘any other information’, on page TR7, enter the details from your EIS3 certificate(s) – company names, the amounts for which you’re claiming relief, the share issue date, the UIR and the HMRC office issuing your EIS3 certificate.
You are not usually required to submit your EIS3 certificate for the investments on which you are claiming tax relief to HMRC, however they may ask to see them, so keep them safe.
Claiming EIS tax relief on your online self-assessment form
When completing your online self-assessment form, you will need to answer yes to the question on ‘other tax reliefs’ in section 3, ‘tailor your return’.
Under ‘other tax reliefs and deductions’ in section 4, ‘fill in your return’, you will need to add the total amount of all your EIS investments on which you wish to claim tax relief and can provide details of each of your EIS investments.
Alternative methods of claiming EIS tax relief
If you do not usually complete a tax return – for example, because you are employed under PAYE – there is an alternative method of claiming EIS tax relief.
You will need to complete pages 3 and 4 of your EIS3 certificate and send them to your HMRC tax office.
You should also use this method if you want to claim the tax relief against a previous year, or if you want to claim deferral relief as well as income tax relief.
Live EIS-eligible investment opportunity
GCV have facilitated over £45 million of investment into high-growth tech businesses – including QikServe, a digital order and payment solution for the hospitality sector, and Intelligence Fusion, a SaaS provider of geopolitical risk management solutions for global businesses – and contributed to the creation of over 600 jobs in the past five years.
And GCV are pleased to announce the launch of their latest EIS-eligible investment round, now open to new and existing private investors.
Read more: live EIS-eligible investment opportunity
Investment from the current round will enable GCV to support 30 high-growth startups and create hundreds of new tech jobs within the North East through its venture builder unit, G-Labs. It will also allow GCV to increase internal headcount from 22 to 40 in the next 12 to 24 months.
Now overfunded, having exceeded the initial target of £1 million, there is still time for new and existing investors to participate in this round before the deadline on Monday 30th November.