Majority of Investors Still Unaware of Small Business Tax Relief Schemes
Only 11% of survey respondents would invest in a UK start-up as report reveals lack of knowledge of government schemes EIS and SEIS
According to a new report conducted by YouGov, only 13% of small business investors are aware of available government tax relief schemes.
Despite widespread coverage and an increase in the number of small businesses making use of schemes, the investment community remain unaware of schemes such as the Enterprise Investment Scheme (EIS) and The Seed Enterprise Investment Scheme (SEIS).
Launched 10 years ago, EIS provides an initial 30% tax relief on investments up to £1m for companies not listed on the stock market. SEIS targets early seed-stage companies and offers investors 50% income tax relief. There is no capital gains tax on profits or inheritance tax for both schemes.
The study, which sourced responses from 2,341 adults, revealed which platforms investors used in the last two years; 28% used stockbrokers, 28% banks, 14% IFAs, and 3% chose to invest via crowdfunding platforms.
The research, which was commissioned by Crowdcube to understand people’s attitudes to investment, also revealed the number of investors who would consider backing the start-up community and how much funding they would give.
Only 11% would consider investing in a UK start-up with 33% stating they would invest less than £499, 13% between £500 and £999, 16% between £1,000 and £1,999, and 15% would invest between £2,000 and £4,999 – only 2% said they would consider investing over £25,000.
Crowdcube co-founder Luke Lang commented on the findings:
“While many investors are benefiting from tax relief schemes it seems that not all investors are aware of them.
“More needs to be done to make people aware of potential tax relief on their investments to boost British small business.”