Savvy investors have ploughed cash worth billions into tax efficient savings, the latest official data shows.
Table of contents
HM Revenue & Customs oversees three investment schemes offering generous tax breaks, raising almost £3 billion in the 2017-18 tax year.
The Enterprise Investment Scheme (EIS) attracted the most cash – £1.9 billion going to 3,920 companies, says the HMRC data release.
The figures were in line with the previous tax year, when 3,655 companies raised £1.9 billion.
More than 1,700 companies attracted £759 million of funding for the first time through EIS.
The most popular investment sector was information and communications, accounting for £641 million – a third of all EIS funding raised.
Most of the money went to London and the South East, around £1.2 billion or 67% of all EIS investment in the tax year.
EIS offers a 30% tax refund on investments of up to £1 million in a tax year. Any growth in shares is free of capital gains tax.
Since EIS was launched in 1993-94, 29,770 companies have received investment and over £20 billion of funds have been raised.
SEIS breaks £1 billion barrier
The Seed Enterprise Investment Scheme (SEIS) has similar terms to EIS but offers investment to start-up companies.
In 2017-18, 2,320 SEIS companies raised £189 million, compared with 2,425 firms raising £187 million in the year before.
More than 1,700 companies raised £159 million of funding for the time.
Like EIS, the busiest sector was information and communications, accounting for £69 million of investment – a share of 37% of all funds raised.
Most of the money also went to London and the South East, around £117 million or 67% of all SEIS investment in the tax year.
SEIS offers a 50% tax refund on investments of up to £100,000 in a tax year. Like EIS, growth in share values is free of capital gains tax.
Since SEIS was launched in 2012-13, 12,900 companies have received investment and over £1 billion of funds have been raised.
SITR dips
In 2017-18, Social Investment Tax Relief (SITR) collected £1.4 million for 20 social enterprises – down from £2.5 million raised by 30 enterprises in the previous tax year.
Since SITR was launched in 2014-15, 80 social enterprises have raised funds of £6.7 million through the scheme.
Related Articles, Guides and Insights
Below is a list of some related articles, guides and insights that you may find of interest.
Questions or Comments?
We love to get feedback from our readers. So, after reading this article, if you have any questions or want to make comments, send us a message on this site or our social media?
Don’t forget that you can also request the guides sent directly to your email inbox.
