EIS Advance Assurance

EIS is a government-approved investment scheme that encourages funding in early-stage, unlisted companies by reducing investor risk in the form of tax relief.

This tax incentive helps to reduce an investor’s capital at risk when investing in young companies and highly increases your chances of securing funding. Therefore it is highly recommended for scale-ups and high-growth businesses to prove their eligibility for the EIS scheme with Advance Assurance clearance before seeking funding – and this is where we can help you out!

What are the benefits of EIS

Companies that qualify for the EIS scheme can raise up to £5 million in any 12 months or £12 million in its lifetime – that includes funding received under other investment schemes and some of the state aid. 

In addition, you might qualify as a Knowledge Intensive company and benefit from an even more generous allowance. If you do, your company might raise up to £10 million per year and £20 million in your company’s lifetime under the EIS investment. Many innovative scale-ups qualify as Knowledge Intensive without even knowing it. 

Benefits for your investors

The EIS scheme is loved by investors as it offers income tax relief at 30%. This annual relief applies to a maximum investment of £1 million (or £2 million for Knowledge-Intensive companies). It can be carried back to the previous year to reduce that year’s tax liability depending on the annual limit for the previous year.

Who is eligible for EIS

You can apply for the EIS Advance Assurance if your company:

• has a permanent establishment in the UK;
• doesn’t have gross assets worth more than £15 million before any shares are issued, and not more than £16 million immediately afterwards;
• have less than 250 full-time equivalent employees at the time the shares are issued.

If you’re part of a group, the majority of the group’s activities must be considered as qualifying trades.

In order to qualify as a Knowledge Intensive company, your company must fulfil one of the following:

• Develop an intellectual property that is expected to become the company’s main source of business within the next 10 years; or
• More than 20% of your employees hold a Master’s (or higher) degree which is functional to their role in the company, and their role involves carrying out research for at least 3 years from the date of the investment.

Our rates

EIS Compliance Phase One – Advance Assurance (Pre-Investment)

The preparation and submission of the (S)EIS advance assurance application to HMRC and answer queries.  – fee from £400 excl VAT. Timing 5-7 days from engagement and information provision.

EIS Compliance Phase Two – EIS 1s & EIS 3s (Post Investment)

To prepare, complete and file the EIS 1 declaration to HMRC. To complete the (S)EIS 3 Certificates once approval is given by HMRC – annual subscription from £500 (excl VAT) or from £50 (excl VAT) monthly (minimum 12 months).

How We Work

Our team, led by Fiona Cross, can support your business by applying for Advance Assurance on your behalf. 

1. We will set up a call ahead of your funding round to learn more about your business and the upcoming investment and advise you on your eligibility and potential pitfalls to avoid.
2. We will liaise with HMRC on your behalf to help you obtain Advance Assurance clearance.
3. After your funding round, we will prepare (S)EIS1 & (S)EIS3 forms for HRMC and provide certificates that enable investors to secure their tax relief.