HM Revenue & Customs (HMRC) produce a quarterly official statistics publication that gives information on the number of companies raising funds, the number of subscriptions and amounts raised through the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS).
Its latest release has been expanded to include the first published statistics for Advanced Assurance Requests (AAR) including the approval rates. This gives us some valuable insights into the amount of companies failing to qualify for the investment schemes.
In addition, from October 2016, it will expand the report even further and publish data on the industrial and geographical breakdown of companies, the distribution of companies by the amount of funds raised, and the distribution of investors by the size of their investment for 2014-15. This will provide us with some intelligence on the impact of equity crowdfunding on early stage investments and crowd investment behaviour.
The EIS and SEIS statistics are compiled using data collected from companies’ EIS1 and SEIS1 returns.
Key points from the from its April 2016 publication:
Enterprise Investment Scheme
· Since the EIS launch in 1993-94, over 24,500 companies have received investment through the scheme and over £14 billion of funds have been raised.
· Data for 2014-5 shows that 3,130 companies raised a total of £1,663 million of funds under the EIS scheme. In 2013-14, 2,820 companies raised £1,573 million of funds.
· Data for 2014-15 show that companies raising funds for the first time under the scheme raised a total of £880 million, similar to the amount raised in 2013-14 (£881 million).
Seed Enterprise Investment Scheme
· In 2014-5, 2,185 companies received investment through the SEIS and £168 million of funds were raised. This compares with 2,090 companies raising a total of £170 million under SEIS in 2013-14.
· Of those companies raising funds in 2014-15, 1,715 were companies raising funds under SEIS for the first time, representing £146 million in investment.
Advance Assurance Requests
· Since 2006-7, there have been a total of 19,660 EIS AAR applications. In 2014-15 there were 3,170 applications and, of these, 2,745 (87%) have been approved.
· Since 2012-13, 10,460 AAR applications have been received for SEIS. In 2014-15 there were 2,905 applications and, of these, 2,570 (88%) have been approved.
The EIS and SEIS are two of three tax-based Venture Capital schemes, the other being the Venture Capital Trust (VCT) scheme.
The EIS was introduced in 1994 to help smaller, higher-risk companies to raise finance by offering a range of tax reliefs to investors who purchase shares in those companies.
The SEIS was introduced in 2012 to complement EIS and is intended to recognise the particular difficulties which very early stage companies face in attracting investment by offering tax relief at a higher rate than that offered by EIS.
The full report can be found here.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.