You may not have heard of the Enterprise Investment Scheme, even though it has been around for 22 years. In simple terms, it’s a scheme offering big tax advantages for investing in UK early-stage businesses. It’s one for the sophisticated investor though, as investing in start-ups and new companies comes with higher risks.
The Enterprise Investment Scheme (EIS) was launched by John Major’s conservative government in 1994 to encourage investment into UK smaller, higher-risk companies. Investors get significant tax advantages in return for including these investments in their portfolios.
Any UK investor can apply, but the general profile of an EIS investor is someone who already has an investment portfolio and most of that will be balanced between equities, bonds or ETF structures, says Charles Owen, founder and director of CoInvestor, an investment platform providing access to the EIS. They’re seeking to add an additional element to their portfolios, like non-correlated capital growth or the tax advantages on offer, he says, and they understand the risks involved.
