A new survey has found that structured tax reliefs are a major factor in why investors back early-stage businesses in the UK, with up to 70% of investors saying that Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and other such reliefs being a key consideration when investing.
The Spring Budget 2023 made a number of changes to the Seed Enterprise Investment Scheme (SEIS), increasing the amount that companies can raise from £150,000 to £250,000, extending the eligibility rules to allow firms with up to £350,000 in assets, and increasing the age limit for qualifying companies from two to three years. In addition, the reforms doubled the amount that individuals can invest through SEIS in a single tax year to £200,000.
The survey also found that investors are increasingly motivated by an “affinity” for the industry they are backing. This means that they are more likely to invest in startups that are working in areas that they are passionate about, and/or have previous experience in.
The future of startup investing in the UK is looking bright, as the country has a strong startup ecosystem and a growing pool of investors who are willing to back early-stage businesses.
For further information on EIS or SEIS from a company (fundraising) or investor perspective, please contact a member of our Tax team below.
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