The changes to the Enterprise Investment Scheme in the November 2017 Budget relate to knowledge intensive companies. So, what’s new?
- An investor can invest £2m annually, as long as any investment over £1m is into a knowledge intensive company. The previous cap was £1m.
- The maximum a company can raise in any 12 month period has been increased from £5m to £10m.
- To determine whether a company is too old to be eligible for EIS, to start the clock ticking, the company may choose whether to use the date of its first commercial sale or the date from which its turnover exceeded £200,000.
Many were expecting the rules to be tightened up. This will still happen. Investments that will be effected are likely to be those into more stable and established companies – rather than the high risk businesses that EIS was introduced to support.
To see how EIS and SEIS are changing, you can take a look at the updates to the rules contained in the 2016 Budget here.