George Osborne is to press ahead with proposals to expand the Enterprise Investment Scheme (EIS), says Larry Elliott in The Guardian. Income tax relief is to be raised from 20% to 30% for EIS investments, backdated to April 2011, and investor limits will be doubled to £1m, as of April 2012. Osborne hopes improved tax breaks will encourage greater investment in some of Britain’s fast-growing, smaller companies at a time when there are complaints about banks’ refusal to lend. Though high-growth companies account for only 6% of businesses in Britain employing more than ten people, over the past three years they have created 54% of all jobs in firms with more than ten staff.
However, there are rules that a company has to observe to qualify for the tax relief, notes HMRC’s website – “not just at the time of the investment but for at least three years afterwards”. If it fails to do so, tax relief will not be given, or, if it has already been given, it will be withdrawn. For further information, visit www.hmrc.gov.uk/eis.