By investing in EIS and therefore helping small UK businesses, it is only right that the investor should benefit from their investment. Some of the ways investors can benefit include:
- By investing in small promising companies, investors can benefit from significant potential investment returns.
- Unlike investors in many traditional investments, many EIS investors benefit from a closer relationship to the company they invest in.
- Investors benefit from the many valuable tax reliefs available. These can reduce the risk of investing in a smaller company and also enhance overall returns.
2. The company
Over recent years, it has become increasingly difficult for small businesses to obtain traditional finance. Tougher lending criteria, less support from banks and general restrictions on other forms of finance mean that, however good the company, it can sometimes be exceptionally challenging to raise funds.
EIS provide British businesses with an alternative way to fund their business. The funds raised ca be used to help with most aspects of development, such as the creation of new business opportunities, product launches and entry into new markets.
The EIS has been responsible for the success of many businesses – both small and well-known.
3. The country
The benefits EIS provide the UK economy and the country as a whole is the main reason the government provides the tax benefits. Surprisingly, these benefits are often forgotten by many people. Some of the benefits include:
- Raising Income Tax and National Insurance from EIS company employees.
- Corporation Tax, VAT and other duties from EIS companies, also contribute to the Treasury.
- Helping the economy grow.
- Helping create new British businesses.
- Creating new employment opportunities.
If you are interested in a more detailed analysis of these Tax Relief Schemes, please read the guide: .