Entrepreneurial Taxes: helping businesses to start up and stay up


Allison Ramsay

Allison Ramsay

Tax Senior


Allison Ramsay, Tax Senior at Johnston Carmichael explains how Entrepreneurial Taxes can make a real difference to businesses and make for a rewarding career.

Small and Medium-sized Enterprises (‘SMEs’) are the lifeblood of the UK economy and Entrepreneurial Tax reliefs can be instrumental in helping these young and fast-growing businesses to achieve their ambitions.

The term ‘Entrepreneurial Taxes’ broadly encompasses a number of different tax reliefs that are available to individual investors as well as share option schemes that can be implemented by companies to incentivise, motivate and retain staff.

Working with a wide variety of clients across a broad range of sectors, at Johnston Carmichael I find myself regularly advising on two of the main investor tax reliefs: the Seed Enterprise Investment Scheme (‘SEIS’) and the Enterprise Investment Scheme (‘EIS’). Both SEIS and EIS help smaller, unquoted businesses obtain the funding they need to invest in their infrastructure, whilst also providing generous tax relief for individual investors, by way of 50%/30% income tax relief on the amount subscribed. This can be thought of as a win-win situation for both parties.

Alternatively, or in addition, share option schemes can be used within owner managed businesses to provide employees/management with share options. Given the team is integral to the success of the business, these schemes go a step further to create a mutual understanding that everyone is working towards the same end goal. Option holders are therefore provided with an incentive to work hard and make the business a success, after which they will be rewarded with a share of the business they helped create. There are, of course, tax advantages for the option holder if certain conditions in relation to share ownership are met. The Company also benefits from having grown, and the dispersion of share ownership provides the owner-manager with greater flexibility should they wish to exit or plan for succession. Yet again, this is a win-win situation for both option holders and the Company.

The elephant in the room at the moment is of course the growing uncertainty around Brexit and trying to predict what the business landscape might look like in a few months’ time. But, as the famous saying goes…’nothing in this world is certain, apart from death and taxes’ – so it’s important to get the right advice to help keep your business on the right track through these periods of uncertainty.

Tax is definitely a fast-paced career, with no two days the same. In the Entrepreneurial Taxes team, I’ve had the opportunity to work on some really interesting and challenging pieces of advisory work, ranging from client specific advance assurance reports to tax valuation reports. I’ve also had hands on experience helping clients obtain SEIS and EIS tax relief for their investors, and have completed Employment Related Securities annual reporting for our client base.

In my first 18 months with Johnston Carmichael, I have amassed a wealth of Entrepreneurial Taxes knowledge, through being given the opportunity to meet lots of clients who operate in diverse industries, hear first-hand what their aims and objectives are, take this on board and assess how Entrepreneurial Taxes can be used to help them realise their objectives.

Tax is definitely a fast-paced career, with no two days the same. In the Entrepreneurial Taxes team, I’ve had the opportunity to work on some really interesting and challenging pieces of advisory work, ranging from client specific advance assurance reports to tax valuation reports. I’ve also had hands on experience helping clients obtain SEIS and EIS tax relief for their investors, and have completed Employment Related Securities annual reporting for our client base.