Although the amount raised via EIS and SEIS fundraising was down in 2015-2016, according to figures just released by HMRC, it was still the second highest ever amount raised since the scheme began in 1993.
EIS raised £1.6bn, down around £230m, whereas SEIS came in at £169m, down by £8m.
Market observers put the reduced figures down due to the regulation changes and the removal of energy generation as an EIS qualifying investment.
The Director General of EISA Mark Brownridge said: “It is no surprise that EIS and SEIS fundraising was down in 2015-16. The rule changes affecting the venture capital funding sector that were introduced by the government in late 2015 were designed to limit and restrict businesses’ eligibility for EIS and SEIS funding. 2015 also saw the end of energy generation as a qualifying EIS investment, so perhaps the only unexpected thing about the figures is that the decline was not greater. Almost £1.6bn was raised via EIS in 2015-16, which though less than the record total of £1.8bn of 2014-15, is still higher than 2013-14’s total, which was itself a record at the time.
“That the second highest ever amount was raised in 2015-16 shows that, despite the new rules restricting the EIS sector, the Enterprise Investment Scheme remains an extremely important and necessary source of funding for UK businesses.”
GrowthInvest Managing Director Daniel Rodwell added: “There was potential for a sizeable hole in EIS & SEIS funding due to the exclusion of renewables. The total of the £1.6B, 2nd highest year in record, should be viewed as a very positive one. Furthermore we view the slight downturn in numbers as being primarily due other factors, including the enforced rule changes, we hope that these restrictions will be reversed in future years by the government of the day in a post Brexit environment. These figures are a clear signpost that EIS/SEIS investment holds the key to a new look UK economy.”