The Next Alexa? Surfing the IP Challenges for Artificial Intelligence
13 September 2018
The EIS regime de-risks investment by offering investors generous tax reliefs. Although tax-rates are rising, the Government appears keen to continue to promote EIS. There are many success stories. We help you attract investors by securing EIS approval for your business to pass onto investors. By working with us you secure tax expertise, commercial experience gained via working with many developing businesses and a relationship with a law firm who can help you grow.
Please do call us to discuss your requirements.
Latest government statistics relating to the Enterprise Investment Scheme (“EIS”) show:
HMRC do not accept error excuses. This means if you do not file the right information on the right form the company will not qualify for EIS. HMRC is unconcerned that none of your investors will benefit for EIS tax relief if you filed incorrectly.
We provide a one stop service for businesses that can include:
We offer EIS services in a flexible way tailored to your requirements:
The reliefs available to EIS investors include:
There are hidden risks for EIS investors which we can uncover. For example:
Shareholder rights: especially a focus on anti-dilution provisions within the EIS parameters. We review the corporate documentation – mainly the shareholders agreement and articles of association.
We look at the ability of an investor to obtain EIS relief. The tax residence of the investor may need a review. Also, the investor will suffer if the trade does not qualify under the EIS legislation as “trading”.
To determine whether EIS is available there are three areas to consider:
There are two issues:
The shareholders must meet the following requirements:
There are requirements around the company’s size and status:
A company has always been able to raise up to a £15 million lifetime limit, via any combination of SEIS, SEIS or VCT. For knowledge-intensive companies, this rises to £20 million, and the employee limit from 250 to 500 employees, if the company meets:
The following factors will deny EIS relief:
Any EIS investor’s shareholding has always been restricted to 30% of the company’s total issued share capital. Now an investor only gets EIS relief for additional investment if:
In effect, investors must now seek EIS relief in a company from the start.
Investors can no longer invest in a company that has been trading for more than 7 years. Clearly this change restricts investment opportunities for older companies. There are a couple of exceptions: e.g. if the investment
Qualifying for EIS relief includes a requirement of an “intention to grow and benefit a business”. It is not known how HMRC will deploy this weapon but there are special rules if it is intended to use EIS funds to repay a loan.
We worked with Gannons on our second EIS fund raise. As nerve wracking as it was, Gannons gave us invaluable support throughout the process. We were very impressed with how responsive and pragmatic they were.
Gannons helped us with our EIS share issue. Helen and Veronika are extremely efficient and can spot a mistake from afar. I recommend the team.