Can Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS) still be used successfully for film? This is a question dividing opinions in the UK industry.

HM Revenue & Customs (HMRC) wants assurances that companies applying for EIS funding — in recent years a major source of independent film financing in the UK — have long-term growth plans and that investors face a genuine risk of losing their capital. Rules governing the EIS passed into law in March last year to include a “risk to capital” test.

As film, TV and video outfits have discovered, single projects (whether individual movies, TV dramas or games) and slates of projects are no longer eligible. EIS and SEIS are instead aimed at supporting companies early in their existence (within seven years of their first commercial sale). These companies must be engaged in qualifying trades and they must use the money to grow and develop their business.

Film still qualifies. In theory, the new regulations should enable ambitious UK production outfits to scale up.

“EIS has been through a transformation with the introduction of HMRC’s risk to capital rules,” says Stephen Bristow, partner at Saffery Champness, who has been involved in the policy development of independent UK film and television for the past 15 years. “Those businesses looking for patient capital to grow their business should fall within the new rules. We have recently had confirmation from HMRC via the advanced assurance system that this is the case.” Advance assurance is a way of checking if new schemes would be likely to secure approval from HMRC.


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