EIS investment into startups hits £2.5bn all-time high
The latest figures from HM Revenue & Customs (HMRC) show more private investors than ever backing startups with their cash.
HMRC data for the 2021-22 tax year shows UK retail investors ploughing £2.5bn into startup companies through the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), a 39% jump from the previous year for EIS, and a 16% cent jump for SEIS.
Set up in 1994, EIS and SEIS Investments are available to certain companies and offer investors generous income tax deductions, of between 30% and 50%, if held for four years.
In total, during the 21-22 tax year, £30bn of private investors’ cash was raised by 53,000 companies, including hundreds of well known fintech companies.
London and the South East accounted for the majority of this investment, but investors are increasing in number more quickly in other regions. The South West saw an 87% increase in the rate of growth compared with the previous year. Scotland and the West Midlands also saw increases, of 61% and 54% respectively.
EIS Association director general Christiana Stewart-Lockhart said ‘These figures show the continued success of the EIS and SEIS in driving innovation and entrepreneurship across the UK by encouraging investment in small and early-stage businesses. It is fantastic to see such significant growth in investment across the regions and devolved nations, a key priority for EISA. We are delighted to see more and more entrepreneurs securing much-needed investment through these schemes, which will help drive economic growth and create jobs in all areas of the UK.’