A number of tax relief schemes exist in order to encourage investments into enterprise.
These are designed to help smaller or newer businesses to raise the capital that will help them to grow and succeed, and they also represent exciting opportunities for investors.
Among the most well-known are the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS).
The SEIS applies to early-stage companies. An investor can back a new enterprise to the tune of £100,000 and receive 50% tax relief, as well as Capital Gains Tax exemption on the investment. Each new company is eligible for up to £150,000 funding through the scheme.
While the risk of investing into a start-up is greater than investing into an established and thriving business, many see an investment through SEIS to be relatively low risk thanks to the tax relief on offer.
With many nuances in both schemes, professional advice is worthwhile to ensure both the business and investor qualify for the schemes.