Several investment schemes provide a basket of tax reliefs to individuals who are prepared to risk their money by subscribing for new shares in small trading companies.
Two such schemes are the Enterprise Investment Scheme (EIS) and the similar Seed Enterprise Investment Scheme (SEIS) for early stage trading companies. These schemes were due to end in 2025 but they will now be extended for an indefinite period.
The amount that each investor can invest under the SEIS will be doubled to £200,000 per year from 6 April 2023. The conditions for a company using the SEIS to raise funds will also be relaxed so that it can raise up to £250,000 and have assets of up to £300,000. Currently such companies must be within two years of starting their trade when they receive funds under the SEIS and this will be extended to three years.
Employers can encourage their employees to take a stake in the company by providing them with share options. Under the Company Share Option Plan (CSOP) employees can be granted share options with a market value of up to £30,000 and the Chancellor has proposed doubling this cap to £60,000 from April 2023. If you are looking to raise money to start or develop a business, or simply to motivate and retain staff, we can advise you on the best schemes for your needs.