EIS & SEIS: Update on the Mini-Budget 2022

Last month, Truss’s government held the Mini-Budget, where new Chancellor Kwasi Kwarteng announced plans on tax, energy and economic growth policies that is a complete U-turn from previous initiatives.

We summarised the main points from the day and what they mean for UK’s high-growth businesses. You can find the full details on our website. Sign up for our newsletter and receive our updates.

A few positive pieces of information were announced on EIS & SEIS schemes as part of the significant government emphasis on growth. “The Growth Plan“— calls for the UK’s need for economic growth, as opposed to an increased tax burden. The new target growth rate is 2.5%, with the majority of the new policies presented as growth incentives.

The new Growth Plan affects various existing policies, including EIS & SEIS.

The EIS will be extended beyond 2025 

The chancellor of the exchequer Kwasi Kwarteng announced that the Enterprise Investment Scheme (EIS) will both be extended beyond 2025. 

This announcement was welcomed by the investment trust sector; however, clarification is needed on how the government will remove the existing uncertainty surrounding the scheme.

Despite that, EIS schemes received support in playing an important role in the UK’s funding ecosystem and and will continue to support the growth of our economy during these uncertain times.

The SEIS limits & qualifying requirements will be extended

The Seed Enterprise Investment Scheme (SEIS) limits would also be increased from April 2023.

From the new 2023-2024 tax year, companies under SEIS will be able to raise up to £250,000 of SEIS investment, a two-thirds increase.

The Treasury said the government is “helping businesses in the United Kingdom to grow” by increasing the availability of the SEIS and the company share option plan (EMI). Both of them are designed to help British companies to raise money, attract talent and grow.

To enable more companies to use SEIS, the gross asset limit will be increased to £350,000 and the age limit from 2 to 3 years.

To support these increases, the annual investor limit will be doubled to £200,000. 

Upcoming changes will help more than 2,000 companies a year that currently use the scheme. Under EMI, qualifying companies will be able to issue up to £60,000 of CSOP options to employees, double the current £30,000 limit.

If you are interested in SEIS/EIS and would like to learn more, please visit our website, or get in touch with our team of experts.