The MoneyLab Blog

Irish cross border trade considerations for Brexit & beyond

Posted by Vasiliki Carson, Sapphire Capital on 15-May-2018 15:03:43


The stickiest point in the Brexit considerations is, arguably, the question of the Irish border, being the UK’s only land border. As a result, there is uncertainty and ensuing anxiety for entrepreneurs and early-stage companies both North and South of the border, that are trying to figure out how to best prepare themselves.

Here is how I see what Irish entrepreneurs need to think about in order to  prepare for Brexit and the ensuing implications for cross border trade between the South and the North of Ireland:

Read More

Topics: EIS Schemes

Four key changes to SEIS & EIS you now need to be aware of

Posted by Vasiliki Carson, Sapphire Capital on 26-Mar-2018 16:03:51


 

The EIS changes initially announced in the 2017 Autumn Statement have now passed into law with the granting of Royal Assent on the 15th of March 2018. Here are the four main changes that you need to be aware of currently:

1) Advance assurance applications must include the names and addresses of potential investors. This change was made to reduce the number of applications that HMRC receives, to reduce the volume of requests to better concentrate efforts on propositions that have a higher likelihood of raising capital. HMRC guidelines require for applicants to provide the names and addresses of six interested investors (of course if you are raising a small amount, six names may not be necessary). For more information on this change, please see our prior blog called "The chicken or the egg? New HMRC requirements to stop speculative SEIS/EIS advance assurance applications".

Read More

Topics: EIS Schemes

Are the EIS and SEIS set for a makeover?

Posted by Mark Brownridge, Director General of the EISA on 24-May-2017 13:16:27

 
 
Mark Brownridge, the Director General of the EIS Association, discusses the conservative party manifesto's intentions for the future of EIS and SEIS.  Sapphire Capital Partners highly recommend membership of the EISA; an overview of the benefits to becoming an EISA member can be downloaded by clicking here.
 
Are the Enterprise Investment Scheme and Seed Enterprise Investment Scheme set for a makeover? If the Conservative’s election manifesto is to be believed, they might be.

The document says the party is considering further incentives under the ‘world-leading’ (hear hear!) schemes, though, tantalisingly, does not hint much at their nature, beyond suggesting that they may be targeted at ‘innovators’ and start-ups in the digital sector (Conservative General Election Manifesto, page 78, The Best Place for Digital Business).

We have been campaigning for improvements to EIS and SEIS for some time and, broadly speaking (and in lieu of more details), we welcome any changes to the EIS and SEIS regimes that result in more smaller companies getting access to the funding they need to grow.

Read More

Topics: EIS Schemes

Are Seed EIS, EIS and VCT schemes effective?

Posted by Violet Spence, Sapphire Capital on 05-Aug-2015 11:05:00


The government is committed to providing continued support for small and growing businesses, and is doing this through the set up and expansion of tax advantaged venture capital schemes: Seed EIS, EIS, VCT, and SITR. The tax reliefs are available to all individuals with taxable UK income and so far the government have supported over 22,000 businesses with over £17.5 billion of funding provided.

But are these schemes effective?

 

Read More

Topics: EIS Schemes

SEIS and EIS schemes - why is timing so important?

Posted by Vasiliki Carson, Sapphire Capital on 21-Jan-2015 11:28:30

The Enterprise Investment Scheme ("EIS") and Seed Enterprise Investment Scheme ("SEIS") have been in operation since 1994 and 2012 respectively, and they are part of the government's efforts to make the UK one of Europe's best places to start a new business.  As mentioned in our numerous prior blogs on these topics, the schemes have been ever-growing in popularity, particularly within the past two years.  There are a number of reasons for this rise to fame, being as follows: 

(i) an increased awareness of the schemes in the marketplace and the government's ongoing support.

Read More

Topics: EIS Schemes

Is it time for Crowdfunding to grow up?

Posted by Michael McDowell, Sapphire Capital on 07-Dec-2013 19:21:00


With the success of Funding Circle, record breaking months of money raising with Crowdcube and Seedrs and new platforms launching every week, a few questions remain unanswered.  Why are most Enterprise Investment Schemes ("EIS") still being promoted with a scruffy PDF and a long trudge through IFA firms, hotel lobbys and coffees shops? Why is it that it appears to be only the more risky startups and not the established profitable businesses, that are looking to expand via crowdfunding? And of course, the question that I am constantly thinking about, should the term crowdfunding be permanently dropped from the business community and replaced by the more appropriate description of what really is happening i.e. crowdinvesting?

Read More

Topics: Crowdfunding, EIS Schemes, investing, seedrs, crowdcube, high net worth, sophisticated investor, angel networks, angelsden

HMRC EIS pre approval - 10 things you must include

Posted by Boyd Carson, Sapphire Capital on 06-Aug-2013 21:45:00

At Sapphire Capital we have carried out many Enterprise Investment Scheme ("EIS") and Seed Enterprise Investment Scheme ("Seed EIS") advance assurance applications to HMRC.  This has primarily been for clients (and for ourselves) in a diverse range of trading activities such as technology, renewable energy, construction, restaurants, shops, nurseries etc.  Over the years we have learned through experience that there is certain information that is required to be submitted to HMRC on making the application, otherwise HMRC will most likely come back and ask for more information.  Any delay can add weeks to the application process.  It is important to get it right the first time as many investors will not invest in a company unless the company has received advance assurance from HMRC.

Read More

Topics: Seed Enterprise Investment Scheme, EIS, EIS Schemes, SEIS, EIS tax reliefs

Applying for a Seed EIS or EIS? 10 Things You Should Consider

Posted by Boyd Carson, Sapphire Capital on 16-May-2013 23:49:00

So you want to apply to HMRC for a Seed Enterprise Investment Scheme ("Seed EIS") or an Enterprise Investment Scheme ("EIS")? You have heard they are both straightforward to do.  Well that is both true and false.

Since you are dealing with the HMRC you need to make sure you are professional about how you go about the Seed EIS or EIS application. This also applies to how you approach your potential investors. For example, approach your investors before you have applied to HMRC for EIS advance assurance and they could tell you to come back later.  This could be much later as it can take up to eight weeks to get HMRC advance approval.  Eight weeks later your investors could be long gone.

10 SEIS and EIS areas you should consider

Before we get started, keep in mind that every company is different and therefore every HMRC application by default is also different. However, through our years of experience of dealing with HMRC, assisting clients in drafting Information Memorandums and working with investors, we have noticed a few recurring trends and pitfalls, which you should keep in mind for the process.  

Read More

Topics: Seed Enterprise Investment Scheme, EIS, EIS Schemes

Crowdfunding company Crowdcube raise £1.5m in record breaking time

Posted by Michael McDowell, Sapphire Capital on 15-May-2013 21:36:00

Westlake and Lang co-founders of Crowdcube.

If further proof is needed to convince that equity crowd funding is growing in reputation as well investor confidence Crowdcube have delivered it.  They used their own platform to raise £1.5 million in just three days from 259 investors. Existing investors met the initial funding target of £250,000 within the first five hours of the pitch going live, making it the fastest equity funding on a crowdfunding website anywhere in the world. The pitch was then opened up for others to invest with one million pounds being invested in the following 24 hours. The investment, which sets a new world record for funds raised via an equity crowdfunding platform, will be used to fuel Crowdcube’s next phase of growth.

Read More

Topics: Crowdfunding, EIS, EIS Schemes, investing, crowdcube, Alternative Investments, Equity Financing

Business Investment Relief Explained - a 10 point summary guide

Posted by Boyd Carson, Sapphire Capital on 05-Feb-2013 23:22:00

Unfortunately for the vast majority of us, when we earn money we have to pay tax.  We then have a choice to either spend or invest the remainder. However, for those individuals who are resident in the UK but are considered non-domiciled this basic rule does not have to apply in certain circumstances.  From 6 April 2012, the government introduced the very attractive Business Investment Relief ("BIR") - a kind of turbo charged Enterprise Investment Scheme ("EIS") for non-UK domiciliaries.

Put simply, if you are resident in the UK but are Non-UK domiciled (i.e. a "non-dom") and you want to bring your overseas money into the UK to make an investment and NOT pay tax in the process - then Business Investment Relief is your answer.

Read More

Topics: Seed Enterprise Investment Scheme, EIS, EIS Schemes, SEIS, Business Investment Relief

EIS / SEIS Invest in someone and a sector you believe in

Posted by Michael McDowell, Sapphire Capital on 29-Jan-2013 11:05:00

For businesses hoping to grow and expand, the options to raise capital are limited.  To many, Enterprise Investment Schemes and Seed Enterprise Investment Schemes can be a very effective way to solve the capital raising problem.  Likewise, investors with large tax liabilities view EIS and SEIS very favourably.

At the minute though, most investors hear about EIS/ SEIS schemes from their accountant, wealth manager/ IFA or the scheme promoter themselves.  

A nicely printed brochure or more usually a scruffy print out is handed across along with a pitch - with the proviso, "well, if the company doesn’t work out at least you'll get the tax benefit".  The brochure is usually a difficult read as the FSA make certain demands- that are important to protect the investor - but they do little to illustrate the merits and finer points of the investment.  Subsequently to raise all funds required can be a long and difficult process.

Read More

Topics: Crowdfunding, EIS, EIS Schemes, SEIS, Alternative Investments

EIS tax reliefs explained - Part One - Income Tax Relief

Posted by Boyd Carson, Sapphire Capital on 22-Jan-2013 23:34:00

We are often asked to explain the EIS tax reliefs.  They are definitely generous and can make any investment more attractive, or at least, help to protect from downside risk.  Before explaining the tax reliefs in more detail, a word of caution: as I explained in a previous blog article Investing in an EIS? Why you still need to do your homework - you need to make sure you don't focus all your energy on understanding the EIS tax rules and remember to do your due diligence on the underlying investment i.e. its management, the business model, the market opportunities, the competition etc. Enough said.

There are basically FOUR EIS tax reliefs I want to cover as follows:

  1. Income Tax Relief (30% upfront income tax relief).
  2. Capital Gains Tax Re-investment Relief (tax free growth).
  3. EIS Loss Relief against Income or Capital Gains (loss set against income to reduce tax).
  4. IHT Relief and Business Property Relief (100% IHT relief after two years).

In this first article, I will cover Income Tax Relief.

Read More

Topics: EIS, EIS Schemes, EIS tax reliefs

Investing in an EIS? Why you still need to do your homework.

Posted by Boyd Carson, Sapphire Capital on 02-Jan-2013 22:01:00

We have invested in many Enterprise Investments Schemes ("EIS"). Some have gone well and some not so. A good example of one that did not go well was back in 2007 when we invested in an online company that specialised in the gaming market.  The company delivered its product via mobile phones which were just beginning to really embrace the gaming market.  Better still, the target market was eastern Europe and Russia, which was identified as a real growth market for gaming.  The promoters appeared trustworthy with the skills to get it done.  Everything seemed right and we were very excited about the investment. We, along with other private equity investors, put our money in via an EIS scheme and looked forward to our future returns. 
Read More

Topics: EIS, EIS Schemes, Alternative Investments