Expansion gets the green light from EU
Increase. The 2017 Budget contained a number of announcements which meant that the enterprise investment scheme (EIS) was to be expanded with effect from 6 April 2018, albeit only for investments in knowledge-intensive companies (KICs). These changes included doubling the:
- maximum permitted relievable investment per individual to £2 million in any tax year
- amount that the company can receive from EIS (or other risk capital investments) to £10 million in any twelve-month period.
These changes augment the existing regime for KICs, which is already more generous than for other companies.
Doubt. Changes to the EIS are subject to approval by the EU’s Commission for State Aid. As this was delayed for the enterprise management scheme earlier in 2018, there has been some doubt about whether investments made after 6 April 2018, but before approval was given would be able to take advantage of the higher limits. This could mean a client who had invested £2 million on 6 April missing out on £300,000 of relief.
Backdate. Fortunately, approval was forthcoming in a timely manner, and commencement regulations for the changes were published as SI 2018/931 on 8 August 2018 (see Follow up ). These confirm that the changes are backdated to 6 April 2018 as originally intended.
SI 2018/931