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Industry experts react to HMRC data that shows record year for EIS and SEIS

by | May 17, 2023

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Earlier today, HM Revenue & Customs released its latest Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) data for 2021 – 22 highlighting that the schemes had seen record-breaking years.

This will come as exciting news to industry leaders as as it confirms that the EIS and SEIS continue drive vital investment into small and early-stage businesses.

Both investors and entrepreneurs have reacted to the news and shared their thoughts with GBI Magazine.

Fuchsia Curry, Head of Private Client Marketing at EIS fund manager Deepbridge Capital, said: “The Enterprise Investment Scheme is a core driver of economic growth in the UK, key to supporting early-stage companies and innovators. The UK is home to some of the best tech and life sciences startups and scale-ups on the planet, so it is great to see record funding being made available to such  enterprises. 

 
 

“For investors, research has shown that there is a compelling investment rationale for including venture capital within diversified portfolios. In addition, going forward, with inflation causing increasing numbers of individuals to become higher rate tax payers and the CGT annual allowance reducing, there will be even greater need for investors and financial advisers to utilise EIS as a tax planning tool.”

Kealan Doyle, CEO at Symvan Capital said: “Above all, these latest numbers show the tremendous resilience of the EIS and SEIS markets.  Most investments have had a torrid time over the past 18 months, so it is a sign of the maturity of the market that inflow to growth can continue strongly even during troubled times.  I was recently at Consensus in Austin, Texas (i.e. the largest blockchain and Web 3.0 conference globally) and the severe decline in early stage investing was all too apparent, making the UK numbers look even more striking. “

Dr. Ilian Iliev, Managing Director at EMV Capital said: “At a time of a global downturn for the VC industry, the UK’s EIS infrastructure has provided an important backstop to the UK’s Deeptech and life-sciences industry, while the investment environment re-aligns.”

 

David Mott, Founder Partner, Oxford Capital commented: “EIS continues to help thousands of entrepreneurs grow their businesses and encourages more investors to back the companies that are the foundation of our future economy. For the Exchequer, the return on investment is high as well – new jobs created result in employment taxes, profits provide corporation tax and sales generate VAT. This balanced equation is working but must never be taken for granted.”

Dr Paul Mattick, Director of Mercia Fund Management said: “It is pleasing to see the rapid increase of EIS investment across the country, but I am specifically happy to see the amount of EIS invested in the Southwest, Scotland and West Midlands regions growing very substantially.  EIS investment stimulates innovation and supports entrepreneurs, and the country’s future growth needs to come from across the regions, rather than being focused in the Southeast.”

James D’Mello, Head of Strategic Partnerships, Fuel Ventures said: “The latest figures from HMRC reveal a promising trend in the SEIS and EIS schemes for the 21/22 tax year. With a notable 39% increase in total funds raised compared to the previous year, these results reflect growing confidence and support for innovative ventures, all over the UK. Also, Given the increase in the number of people claiming tax relief, it shows the positive effect that these investments are being used by more and more people each year. We at Fuel Ventures welcome this positive update, which demonstrates the continued success and impact of the S/EIS ecosystem.”

 

Alistair Marsden, Director at Nova Growth Capital said: “I am delighted to see that HMRC has reported record-breaking investments in the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). These schemes are vital to the growth of the UK’s early-stage businesses, and I am proud to be a part of the ecosystem that supports them.

“As a fund manager of a small VC firm in the North West, I have seen firsthand the impact that these schemes can have on businesses. They provide much-needed capital to help businesses grow and create jobs, and they also offer investors the potential for significant tax breaks.

“I encourage all investors, particularly those in the North West, to consider investing in the EIS or SEIS. These schemes are a great way to support the growth of the UK’s economy and to potentially earn a good return on your investment.”

 

Jessica Fox, Head of Marketing & Investor Relations, Haatch said: “The report is very positive indeed and highlights how important the schemes are in supporting early-stage businesses. The fact that this growth was achieved against a backdrop of the pandemic and the start of the war in Ukraine is very encouraging. It is a testament to the growing interest in EIS and the general awareness of its benefits.”

Joseph Zipfel, Chief Investment Officer at SFC Capital said: “We are particularly encouraged by the growth of the SEIS figures, with a 16% increase in funds raised by companies in 2021 to 2022 under the scheme. We expect this trend to accelerate thanks to the extended SEIS limits introduced on 6th April 2023, which will significantly increase the attractiveness of the scheme to investors.”

John Oliver, Sales Director at Vala Capital said: “It was fantastic to see HMRCs latest report showing that record breaking amounts have been invested into EIS and SEIS qualifying companies in 2021/22. This news is a welcome shot in the arm for the industry after a challenging few years, and reflects the growing confidence and enthusiasm among investors towards early-stage and innovative businesses, and the potential they have.

 

“It is also testament to the strong entrepreneurial culture that we have here in the UK, which importantly is evident throughout the entire country with investment being less focussed on London and the South East as historically it has been. As a venture capital firm it is brilliant to see, and reaffirms our belief in the potential that the EIS and its associated tax benefits can have in supporting companies to raise finance and grow, to the benefit of our economy, our founders, and our investors.”

Dan Rodwel, CEO at GrowthInvest said:“We are extremely encouraged to see the recent HMRC data, confirming a record year for both EIS and SEIS.  It is pleasing to see wider usage of the scheme by investors as well as a meaningful increase in investment across the regions. This data backs up a noticeable trend on our platform of financial advisers and wealth managers across the UK realising the importance of the inclusion of Venture Capital within their client portfolios, and introducing EIS, SEIS and indeed VCTs to more and more of their key clients.    Overall, this data justifies the government’s ongoing support of these schemes, and their importance in supporting UK entrepreneurship and innovation”. 

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