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NAAn EIS Compliance Statement, often referred to as EIS1, is the form a company submits to HMRC to confirm that it meets all the requirements of the Enterprise Investment Scheme (EIS). It is a key step in allowing investors to claim EIS tax relief on their shares.
What it does
The EIS1 form provides HMRC with detailed information about the company, the investment raised, and how the funds will be used. HMRC reviews the submission to ensure the business and the share issue comply with EIS rules, such as qualifying trade activities and the correct use of funds for growth and development.
Why it matters
Once HMRC approves the EIS1 submission, the company receives an EIS2 authorisation. This allows it to issue EIS3 certificates to its investors, enabling them to claim the available tax reliefs. Without a valid EIS1, investors cannot access these benefits.
When it’s used
A company can submit an EIS1 after it has traded for at least four months or has spent at least 70% of the investment raised. This ensures that the business is actively using the funds in line with EIS requirements.
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