These high growth companies usually qualify for EIS tax relief.

The Government gives EIS tax relief because it knows that Early Stage Companies are the main creators of jobs and future wealth in the economy. Despite the current pressure on public sector finances both  the Conservative and Labour parties support this tax relief  and have plans to enhance its effectiveness.

For the precise impact on your finances you need to speak to a tax advisor but in summary EIS qualifying investments provide: an immediate: 20% repayment on the amount you invest, capital gains are taxed at NIL% and inheritance tax is at NIL% if you invest in your children’s names. If the investment is unsuccessful, then a further tax deduction of up to 50% of your investment is available.

EIS qualifying investments are essentially purchases of new ordinary shares in qualifying companies by individuals, who are not connected with the company, that have been held for a minimum of three years.