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Bure Valley Group is an investment brokerage business which links successful investors with exciting, innovative UK startups seeking funding. This content is for information purposes only and should not be taken as financial or investment advice. 

Our investment team here at Bure Valley Group is getting lots of questions at the moment about their portfolios, especially in light of the COVID-19 lockdowns. Given all of the market volatility, many are looking for an “edge” to try and balance out the volatility and find opportunities which will provide an attractive return. Two options you may want to look at are Enterprise Investment Scheme (EIS) opportunities and fixed-income investments such as property loan notes.

We offer both here at Bure Valley Group an invite you to take a look at our latest investment opportunities on our portfolio page. In this post, we’ll be answering some of your common questions about how EIS works and what’s involved for an investor. If you don’t see an answer to your own question here, please get in touch and our team will be happy to assist you.

To enquire about our latest projects and funding, you can reach us via:

+44 160 334 0827

 [email protected]


How does the Enterprise Investment Scheme (EIS) work?

The Enterprise Investment Scheme (EIS) offers people a great way to invest in innovative UK companies, at reduced investment risk and with some attractive tax benefits.

For instance, as an investor, you can claim 30% of the value of your EIS investment against your income tax bill. So, if you invest £10,000 in an EIS-qualifying company within a single tax year, you should be able to claim back £3,000 when you complete your tax return.


Can Overseas Companies Qualify for EIS?

It is commonly believed that only British companies can qualify for EIS, but that’s not actually the case. What matters is that the business in question meets the criteria for EIS set down by HMRC. For overseas companies, these include:

  • A permanent UK establishment. This means that an important part of the business’s work is performed at a location in the UK (e.g. a workshop, office or factory). 
  • ‘Agent acting on behalf’ of the company. Alternatively, the company in question must have a UK-based agent who is able to make decisions on its behalf (e.g. signing business contracts). The agent cannot be “independent”, so an employee will not be able to be the “agent” unless they have authority to enter contracts on behalf of the company. 

In general, it’s a good idea for overseas companies to do both – i.e. have a fixed place of business in the UK as well as a UK representative.  


Is EIS relief available to companies?

It isn’t necessarily straightforward to answer who can qualify to invest in an EIS company. There is a strict set of criteria you must meet to qualify. If you are at all unsure if you meet the criteria, please get in touch and we’d be happy to assist you. Here is an initial guide to get you started:

  • Qualifying investors cannot be “connected” with the EIS company (e.g. relatives of the EIS company directors, although there is an exception for siblings).
  • Connected persons’ business partners cannot invest in the EIS company.
  • Director and employees cannot invest in their own EIS company, since the aim of the scheme is to attract outside investment.
  • Investors and their “associates” cannot own more than 30% of an EIS company’ share capital.

Assuming you meet the criteria to become an EIS investor, you can become eligible to receive the EIS tax reliefs available to you such as loss relief and exemption from capital gains tax (CGT) on EIS shares held for at least three years.


Are EIS companies a good investment?

Naturally, there is a concern amongst investors that EIS companies might be too “risky” during a turbulent market (such as the one we have experienced in Q1 of 2020). Yet there are great benefits to including EIS opportunities within your portfolio, including the following:

  • The opportunity to generate strong returns, possibly even as mainstream markets are experiencing difficulties. Remember, many EIS-qualifying companies are operating in niche, innovative markets which are solving problems where solutions are long overdue. Right now, an EIS-qualifying startup operating in the realm of pandemic control and vaccinations might expect to do quite well! 
  • Limiting tax liability. EIS offers amazing tax benefits to investors which are difficult to find elsewhere. Of course, there is the reduction in your income tax bill mentioned above, equivalent to 30% of your EIS investment. However, there is also exemption from inheritance tax (IHT) on EIS shares which you have held for at least 2 years. You can also exempt these from CGT if held for at least 3 years.
  • Loss relief. If things go wrong and your EIS investment fails, what happens? Here, you can access a great mechanism called “loss relief”, which allows you to claim back some of your original EIS investment; equivalent to your highest rate of income tax. So, if you pay the additional rate (45% in 2020-21) then you can claim back 45% of your “at-risk” EIS investment capital if the company fails. 



If you are a successful investor looking for EIS investment opportunities, or if you are a business owner looking for funding, then we’d love to hear from you. 

Get in touch today to start a conversation with our team, and discuss some of the great investment memorandums we have available:

+44 160 334 0827

 [email protected]