New figures published by HMRC today show that the number of companies raising money through the Enterprise Investment Scheme (EIS) grew to a record high of 4,480 in 2021/22, a 19% rise compared to the previous year, with funding increasing to £2,305m, up by 39% over the same period.

The figures show that usage of the EIS bounced back following the pandemic and even surpassed the levels prior to the pandemic. In 2019 to 2020, 4,215 companies raised a total of £1,905 million of funds under the EIS scheme.

EIS investment in 2021/22 was largely concentrated in the Information and Communication sector which accounted for £785m of investment (34% of all EIS investment).

The Enterprise Investment Scheme (EIS) offers tax reliefs to individuals who subscribe for new shares in a qualifying company. This allows EIS companies to raise up to £5m each year to grow their business, up to a maximum of £12m over a company’s lifetime.

There are a number of qualifying rules for EIS. For example, the scheme applies only to companies that have a permanent establishment in the UK, are not listed on the stock exchange and do not have gross assets worth more than £15m before the EIS shares are issued (and not more than £16m immediately afterwards). The relief also only applies to new or relatively new companies, as EIS investment can only be received if it’s within seven years (10 years for knowledge intensive companies) of a company’s first commercial sale.

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