A drop in EIS/SEIS Investment - but what’s on the horizon?

Stephen Oates

Stephen Oates

Tax Director and Head of Entrepreneurial Taxes

In slightly unwelcome news, data has been released by HMRC and published recently in Taxation Magazine, which shows that for the tax year 2022/23, enterprise investment scheme (EIS) investment is down by approximately 15% on the previous year, and fewer companies actually raised investment.

Tax yearInvestmentNumber of companies

The data also shows that investment through the seed enterprise investment scheme (SEIS) fell by 24%.

Despite the drop in investment, we must be conscious of the fact that this was in the period to 5 April 2023 and various changes were made to SEIS, which came into effect from 6 April 2023, such as:

  • The company investment limit increased from £150,000 to £250,000.
  • The gross assets limit increased from £200,000 to £350,000.
  • The age limit of a company’s “new qualifying trade” increased from 2 to 3 years.

These steps were introduced with the hope of increasing the number of companies that qualify for SEIS and thus the amount of SEIS investment. It will therefore be interesting to see whether the 2023/24 data shows an upward trend following the changes.

The hope is that we see a marked increase in EIS uptake moving forward. This is supported by increased talk from the key political parties on prioritising growth which hopefully bodes well for SEIS and EIS qualifying companies. 

The question remains though, how do the politicians intend to realise this growth? I am sure I am not alone in saying that the marketplace would welcome clearer guidance, additional simplification to the complex rules and potential changes to the qualifying conditions/limits, in line with those previously made for SEIS, that would hopefully see an increase in the number of companies that would be able to access this type of investment.

Only time will tell if these changes, or any, are on the horizon.

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