UK Tax Schemes Propel Investments in Innovative Startups and Social Enterprises

The latest government statistics have been released on the UK government's three tax-incentivised funding programmes:

• Enterprise Investment Scheme (EIS),
• Seed Enterprise Investment Scheme (SEIS)
• Social Investment Tax Relief (SITR)

These reliefs have been making noteworthy strides in boosting investments into startups, innovative firms, and social enterprises.

Here's a summary of the key points:

EIS: Despite a dip in investment during the early quarters of the tax year 2020-21, the EIS saw a strong rebound in the final quarter, with investment figures surpassing pre-pandemic levels. This trend carried over into 2021-22, with both the number of companies raising funds and the total amount raised through EIS breaking previous records. However, it's important to note that the proportion of investment into new companies has been declining, likely due to further restrictions introduced via the risk-to-capital condition.

SEIS: In 2021-22, the number of companies raising investment under SEIS increased and the total amount raised also rose by 16%. This is the highest amount raised since the scheme's introduction. It's apparent that the sector has adjusted well to the risk-to-capital condition that was implemented in 2018-19.

SITR: There has been a noticeable increase in funding for social enterprises, with £5.4 million raised by 40 enterprises in 2021-22. This comes after changes in 2017 that increased the maximum amount of investment young social enterprises could raise through SITR to £1.5 million.

Looking Ahead: With continuous adjustments and the introduction of new limits, these three tax schemes are set to support even more growth and innovation in the years to come.

Photo by Isaac Smith / Unsplash