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Tax Relief

One consideration for planning your raise is whether your offer is eligible for tax relief


 

Tax Relief

The UK government has several types of tax relief available for individuals who invest in start-ups and social enterprises. Your enterprise may qualify for the following tax reliefs, meaning that eligible investors might be able to claim tax savings, making the overall investment in your organisation more appealing.

The types of tax relief available include:

Social Investment Tax Relief

Social Investment Tax Relief (SITR) is the UK Government’s tax relief for social investment which helps social enterprises access new sources of finance by providing a 30% tax relief to investors, supporting their investment.

Ethex has a £2 million match fund from Big Society Capital which, if your enterprise is SITR eligible, it can benefit from.

Seed Enterprise Investment Scheme

The Seed Enterprise Investment Scheme (SEIS) is designed to help early stage enterprises raise money by offering generous tax relief to individual investors who buy shares in your company. If your enterprise qualifies of the first £150,000 of investment will be eligible for SEIS, meaning investors can claim 50% tax relief on their investment.

Enterprise Investment Scheme

The Enterprise Investment Scheme (EIS) has been designed by the UK government to help you raise the money you need to grow your enterprise. As with SEIS, EIS does this by offering a 30% tax relief to investors buying shares in your company. Under EIS, companies can raise up to £5 million each year and up to £12 million in the company’s lifetime which will qualify for EIS.

SITR, SEIS and EIS also have additional benefits for investors in terms of capital gains tax relief and loss relief if the business fails. 

Innovative Finance ISA

Social enterprises may be able to offer debt-based investments like bonds within an Innovative Finance ISA wrapper. Investors can then benefit from tax-free returns on their investments up to the annual limit. Previous years ISA allowances can also be rolled in which makes products that can be held in an IFISA potentially more attractive as investments. 

The Ethex development team are here to help from 9am to 5pm

Call: 01865 403 304

Email: business@ethex.org.uk

 

Need help?

The Ethex team are here to help from 9am to 5pm

https://www.ethex.org.uk/savings--investments_16.html

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