Upcoming Changes to Enterprise Investment Scheme Rules
Is the film industry likely to shortly lose EIS benefits? As with businesses that use EIS and SEIS funds to invest in assets such as property and machinery?
Yes, according to Sapphire Capital Partners who claim that their discussions with people in the know suggest a shift in government thinking on these tax concessions and a move towards focusing EIS and SEIS benefits on high tech and high growth businesses ie., businesses with the ability to scale quickly.
Making a case for increasing employment and tax revenue will no longer be enough for a company to avail of the schemes. …The sector that is to be most affected is film and television companies, as their structures are seen as providing a “capital preservation” strategy – with pre-sales and film tax credits/rebates also offered, the capital invested in these companies is not seen as “risky” enough to require further tax incentivisation.
Changes are expected to be announced in the Chancellor’s Autumn Statement which is due in just under a month.
EIS and SEIS are government incentives offering attractive tax breaks to investors taking a punt on small, unlisted companies. Though EIS and SEIS have changed over the years, and SEIS for example is a bit less attractive now than pre-2012, they are still very popular tax breaks.