Looking to invest or have someone invest in your small business?
It's easy to be put off investing in new businesses. Even the best opportunities can be hampered by risk. Similarly, if you run a new business it can be difficult to encourage people to invest. No matter how confident you are in your start-up, it's not easy to convince that the risk is worth it.
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schemes that make things easier for both investor and business
There are two separate government schemes that were introduced to encourage investment in small business. The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) both incentivise investment into small, high risk businesses. They do so by offering tax relief to investors. This makes the risk of their investment considerably lower. Making them more likely to put their money into a new company.
It can be difficult to figure out which of the schemes is best for you. There are rules that must be followed, but the benefits are worth it.
Benefits of the Enterprise Investment Scheme include:
• Tax relief of 30% on investments up to £1,000,000 per year
• Shares that are held for 3+ years are exempt from Capital Gains tax
• Possibility of 'carrying back' all or part of the investment to the preceding tax year
• Individuals can reduce their tax liability to zero through EIS relief
• Loss relief of 45% of at-risk capital if company closes, heavily minimising the risk
Benefits of the Seed Enterprise Investment Scheme include:
• Tax relief of 50% on investments up to £100,000 per year
• The individual investor can be the director of the company
• Shares that are held for 3+ years are exempt from Capital Gains tax
• Loss relief of 45% of at-risk capital if company closes, lowering risk
So, if you're looking to invest, or find an investor for your business, why not have a go? We understand these schemes can seem complicated. That's why at MoynanSmith accountants in Carlisle, we'll use our expertise to make sure you can get what you're entitled to.
Want to find out how we can help you first hand? Book our FREE 60-minute health check today. Give us a call on 01228 586790 to book one now.
