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HMRC has reduced the number of approvals it gives for the funding of small businesses through the enterprise investment scheme (EIS) according to Growthdeck a private investor network.
HMRC approved only 62% of the 3 270 requests from small and medium-sized enterprises (SMEs) to raise money through the EIS submitted in 2018-19 down from 75% in 2017-18. Over the past ten years HMRC had been approving an average of 85% of applications.
In an attempt to encourage investors towards investing in higher risk businesses the government has made some restrictions to EIS but that seems to have had the result of fewer businesses obtaining permission to raise money through EIS.
Since 2015 HMRC has excluded businesses that have been trading for more than seven years and businesses backed by assets exceeding £15m from raising money through the EIS. This has reduced the pool of businesses that now qualify...
