E.I.S. Frequently Asked Questions


Accolade Office - Enterprise Investment Scheme open to investors - 2016

Phone 0141 774 4600 to check availability of this 30% tax saving EIS


Who can best answer my questions about Enterprise Investment Schemes?

For good, free information from an authoritative source, H.M. Revenue & Customs Small Companies Enterprise Centre is your best contact. Their address is : - S.C.E.C., 1st Floor, Ferrers House, Castle Meadow Road, NOTTINGHAM, NG2 1BB Phone 0115 974 1250 Fax 0115 974 2954. To email them you need to submit a form which can be accessed from their page www.HMRC.gov.uk/eis/add-info.htm

Their website displays the following disclaimer : - "HM Revenue & Customs cannot guarantee the security of emails you send or they send to you over the internet. Information sent by email over the Internet is not secure and is at risk of being intercepted and read by people other than those it was intended for. Any information you send by email is at your own risk. If you would like HMRC to reply by email, please confirm in your message that you understand and accept the risks involved. However, if HMRC's response to you contains any personal or confidential information they will only reply to you by letter or telephone."

Staff at SCEC have been very helpful in answering phone enquires from Accolade. However, it may be (in the long-term) beneficial to communicate by letter as you then have written evidence of their guidance should any dispute arise in future. 

Recently, Tax Tribunals have decided against at least two taxpayers, resulting in EIS relief being withdrawn. These HMRC cases (Skye Inns and Benson Partnership) illustrate why it is prudent to invest in a business that has a 'weather-eye' on all matters pertaining to Enterprise Investment Schemes...a company like Accolade!

The inclusion of H.M.R.C.'s S.C.E.C. address on this page is simply a convenience to people seeking information about E.I.S. In no way should the provision of these contact details be seen as any form of Revenue & Customs endorsement for the Accolade Enterprise Investment Scheme

Directors, Partners or Staff at Accolade Partnership Ltd can NOT give information about any Enterprise Investment Scheme other than our own. Please consult your Independent Financial Advisor or other Qualified Practitioner for advice about EIS.

Where can I find information about Income Tax & Capital Gains Tax relief?

Revenue & Customs produce a series of Help Sheets in PDF format which can be accessed at http://www.hmrc.gov.uk/cgt/shares/reliefs.htm#2 , then follow links.


Is there an organisation that represents Enterprise Investment Schemes?

E.I.S.A. (the Enterprise Investment Scheme Association), whose members are accountants, lawyers and professional firms advising EIS companies and investors, may be able to advise you generally. EISA is the official trade body for Enterprise Investment Schemes. However, it does not deal with individual cases which should be referred to H.M.R.C. Nor can it match companies and investors. Their contact details are :- EISA, Erico House, 93/99 Upper Richmond Road, LONDON SW15 2TG. Phone # 0208 785 55 60 Fax # 0208 785 55 61 email :- Members@EISA.org.uk

Our inclusion of the EISA (Enterprise Investment Scheme Association) address is a convenience to people seeking general information about E.I.S. In no way should providing these contact details be seen as any form of EISA endorsement for the Accolade Enterprise Investment Scheme.

Directors, Partners or Staff at Office Europe Ltd can NOT give information about any Enterprise Investment Scheme other than our own. Please consult your Independent Financial Advisor or other Qualified Practitioner for advice about EIS.


How quickly will I get tax relief on the sum of money that I invest?

You can claim tax relief as soon as the company sends you an HMRC Form EIS 3. 

 

How can I be sure of getting tax relief on the sum of money that I invest? 

Buying shares in a company that's already approved by HM Revenue & Customs for Enterprise Investment Scheme status helps ensure the return of tax you've paid.

One of the most common reasons for investments failing to qualify for relief under E.I.S. is that shares are issued to investors before the company receives payment. This can happen whilst a new business is being registered at Companiesí House and shares are issued as part of the registration process. If the company takes time to open a bank account, shares won't have paid been for until the A/c is operational.

Those shares would then NOT qualify for tax relief under the Enterprise Investment Scheme. Companies and investors should ensure that any shares (on which it is intended EIS relief will be claimed) are not issued during the company registration process but at a later date when the company is able to take payment for them.


Can the tax relief that I've already received ever be taken away? 

At any time within the 3 year share investment period, HMRC can withdraw EIS tax relief that they have already granted. This can happen if either the investor or the company ceases to qualify. These excerpts from the HMRC EIS guide are relevant:-

"It is important that investors are aware of the rules the company has to observe not just at the time of the investment but for at least 3 years afterwards. If it fails to meet those rules tax relief will not be given, or, if it has already been given, will be withdrawn. Similarly, it is important that companies appreciate the conditions to be met by investors, so that shares are not issued on which the investor expects to be able to claim tax relief, only to find that no relief is due." 

"Both investors and companies should note that no relief will be given (or if it has been given, it will be withdrawn) if any scheme has as its main purpose, or one of its main purposes, the avoidance of tax. (The tax reliefs available under EIS are, of course, NOT considered to be avoidance of tax.)"

Depending on your financial circumstances, it may be prudent to 'salt away' the tax relief you receive lest Revenue & Customs decide to reclaim it for whatever reason. 

Recently, Tax Tribunals have decided against at least two taxpayers, resulting in EIS relief being withdrawn. These HMRC cases (Skye Inns and Benson Partnership) illustrate why it is prudent to invest in a business that has a 'weather-eye' on all matters pertaining to Enterprise Investment Schemes...a company like Accolade!

Buying shares in a company that's already approved by HM Revenue & Customs for Enterprise Investment Scheme status helps ensure the relief will not be withdrawn. 

The Accolade Enterprise Investment Scheme has been approved and operating successfully since 2003. Such experience is vital to ensuring constant compliance.


How can I guarantee to get back the money that I invest in E.I.S. shares?

Sorry...there can't be ANY guarantee. Please read this excerpt from HMRC's guide:-

"They must be 'full-risk' ordinary shares, with no preferential rights to dividends, or to the company's assets in the event of a winding up. There must also be no arrangements to protect the investor from the normal risks associated with investing in shares, and no arrangements for the shares to be purchased by anyone else after the end of the relevant period." 

The generous tax incentives offered by the UK Government are conditional on both the investor and company complying with the letter AND the spirit of all EIS rules. You shouldn't make an EIS investment without understanding that risk and reward are inextricably linked. No amount of tax sweeteners can make a bad investment into a good one. Sweeteners only lessen the bitterness when something turns sour.

But you can sway the odds in favour of realising your investment in full. 

Buying shares in a business that already been operates an approved EIS tilts the balance in favour of a successful outcome to your investment. As always, past performance is no guarantee of future results, so you should examine the company Business Plan for potential profit and growth. Accolade has been owned, managed and operated in the same trade and locality for 32 years. The internet now gives Accolade the opportunity to advertise internationally but focus on UK distribution. 

Accolade's EIS is for a NEW venture...but backed by 32 years of experience.



For users of the above notes: 

This material is published for information. It provides an overview of the regulations in force at the date of publication, but no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the author(s) who compiled the data. Accolade Partnership Ltd, 08th Feb 2013.


An Enterprise Investment Scheme is the best way to exploit tax breaks


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EIS relief takes the edge off your tax bill


Inaccessible Pinnacle 
Sgurr Dearg 
Isle of Skye 
Scotland

Photo taken by Bill Gray, 
Managing Director @ Accolade, 
Sunday May 1st 2011

"He either fears his fate too much,
Or his deserts are small,
That puts it not unto the touch, 
To win or lose it all."

Extract from 'My Dear and Only Love' written in 1643 by James Graham, Marquis of Montrose.












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Original images have been pixellated with a pattern that makes them identifiable as the unique copyright property of Accolade Partnership Ltd. © applicable within all legal jurisdictions, worldwide.

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An Enterprise Investment Scheme is an appropriate venture for UK income tax payers who can self-certify being a sophisticated investor.
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