HISTORY OF ENTERPRISE INVESTMENT SCHEMES

Today's Enterprise Investment Scheme is a 'grandchild' of the Business Start-Up Scheme which was launched in 1981. In 1983, BSUS gave birth to the Business Expansion Scheme which was designed to encourage private investors to provide venture capital for unquoted companies, initially for a minimum of five years. 

When the BES was introduced, the Government said that the scheme was so simple “it was something that even Aunt Agatha could invest in”.

The economic climate in 1983 was quite similar to the current one, though for very different reasons. Then, as now, it was difficult for entrepreneurs to access loan capital from banks. 

The thinking behind BES was to remedy this problem by giving tax incentives to investors who bought shares in small trading companies. Providing long-term funds that would otherwise have been unavailable was the principal aim of B.E.S.

EIS is a child of the Business Expansion Scheme

When Sir Geoffrey Howe introduced the B.E.S. in his 1983 Budget speech he said: - “These proposals will transform the position of unquoted trading companies seeking outside equity. It is a further move towards removing the bias in the tax system against the personal shareholder and a further measure to encourage wider share ownership. By concentrating help on those companies which do not have ready access to outside capital, the scheme will assist many more small or medium companies to realise their undoubted potential for growth.” 

As a scheme that offered up-front tax relief at the investor’s marginal rate, BES led to investment being made purely for tax reasons rather than sound business ones. In addition, the breadth of eligible investors and companies (notably residential properties) made the scheme highly attractive as a tax shelter. What had, in its early years, been a useful scheme attracting investment in unquoted trading firms, made only a modest contribution to such funding in its last five to six years. 

BES was phased out 1993 in favour of Enterprise Investment Schemes. 

Enterprise Investment Scheme commenced in 1994

In 1994, following the introduction of EIS, (originally announced in Nov 1993) Michael Portillo, then Chief Secretary to the Treasury said:- “The purpose of Enterprise Investment Schemes is to recognise that unquoted trading companies can often face considerable difficulties in realising relatively small amounts of share capital. The new scheme is intended to provide a well-targeted means for some of those problems to be overcome.”






No amount of tax 'sweetener' can turn a bad investment into a good one...only lessen the bitterness when it turns sour. Avoid having your tax relief withdrawn. Choose a company that understands and complies with complex E.I.S. regulations. Whilst there can be no pre-arranged agreement for realising mature EIS shares, it is some consolation to know that Accolade has a viable investor exit strategy.

*** Accolade Enterprise Investment Scheme re-opened to investors in March 2014 ***

*** Please phone 0844 414 26 77 to check availability of this 30% tax saving EIS ***



An Enterprise Investment Scheme is by far the best way of exploiting tax breaks

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EIS relief takes the edge off your tax bill

Inaccessible Pinnacle 
Sgurr Dearg 
Isle of Skye 
Scotland

Photo taken by Bill Gray, 
Managing Director @ Accolade, 
Sunday May 1st 2011

"He either fears his fate too much,
Or his deserts are small,
That puts it not unto the touch, 
To win or lose it all."

Extract from 'My Dear and Only Love' written in 1643 by James Graham, Marquis of Montrose.









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Accolade EIS is an appropriate investment for UK income tax payers who can self-certify that they are sophisticated investors
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