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Autumn Budget: Gov't to double EIS limits

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Autumn Budget: Gov't to double EIS limits

The government will double tax relief limits on enterprise investment schemes (EIS). 

During the Autumn Budget chancellor Philip Hammond (pictured) said the government will encourage greater levels of investment into 'knowledge intensive' companies. 

The chancellor added the Treasury would work with the Pensions Regulator to establish how to allow pension funds to make long-term investments. 

'Today we are publishing an action plan over £20 billion of new investment in UK knowledge intensive scale-up businesses including through a new fund in the British Business Bank.'

Hammond announced the fund would receive £2.5 billion of public money by facilitating pension fund access to long-term investment, and 'by doubling EIS investment limits for knowledge-intensive companies while ensuring that EIS is not used as a shelter for low-risk capital preservation schemes,' he said. 

Vince Smith-Hughes, director of specialist business support at Prudential, said the rise in EIS limits should be positive for advisers.

'Though we need to look at the detail, the announcement that the EIS level is increasing for investment in some companies will be good news to some savers,' he said.

'However the old adage that the tax tail shouldn’t wag the investment dog should be remembered, the risk being undertaken has got to be appropriate for the client. The tax treatment of EISs is very generous reflecting what should be a higher risk profile on your investment so it will be interesting to see how he is to deal with the use of them for low risk capital preservation.'

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