Vibrant, dynamic economies rely on start-ups to provide innovation and shake-up inefficient industries. Arguably, no scheme has had a greater impact on supporting those businesses than the Enterprise Investment Scheme (EIS). EIS is a tax relief scheme created by the UK government to encourage investment into start-ups and early-stage businesses. Since its inception in 1994 the scheme has allowed 30,000 businesses raise over £20 billion of vital funding. For investors, EIS offers potentially significant income tax and capital gains reliefs for investments into an EIS eligible start-up or business.
The benefits of the scheme are clear, it supports innovation in the economy, which in turn increases productivity, creates jobs, and boosts growth. Despite its generous benefits research suggests that the scheme has provided a net benefit to the Treasury through job creation, with an estimated 180,000 jobs created since inception. It has also made the UK a world leading place to start a business (source: CEOworld), ranking number two in the world behind the USA.
In these turbulent times, one can only hope that future governments, regardless of political persuasion, continue to recognise its value and keep the scheme in place long into the future. Now more than ever, UK needs to maintain its standing as a great place to start a business to build a dynamic, highly productive 21st century economy.