Today I’ll look at possible future changes to (S)EIS reliefs. There’s no real chatter about changes in this budget but leaving the EU means state aid rules (see last Tuesdays blog) won’t necessarily need to apply from next January depending on which Brexit we get: and in the case of an ‘Australia type deal’ (i.e. no deal) one silver lining might be that limits in this area could be relaxed.
Much of todays thoughts are sensible ones lifted from the budget representation from the very marvellous Mark Brownridge at the Enterprise Investment Scheme Association (EISA) – so thank you Mark.
The obvious potential advantage is that, Assuming an ‘Australia style’ exit then state aid rules may no longer apply, and the limits for de minimis aid may be extended or even removed altogether. May be a long shot this, and puzzling to see how it fits with the redefining of the employers allowance as de minimis aid, but shy bairns get nowt.
(S)EIS has been an important component in allowing companies to grow, with 90% receiving investment in this way confirming headcount growth since investment was received.
More can be done around scale-ups. The current EIS cap, both in terms of time and amount, whilst on first appearances feeling generous, leave a funding gap. Removing the limits will help encourage follow on investment from the private sector and open further pathways to finance for companies in this position.
Do your stuff Rishi.
