Accredited official statistics

Enterprise Investment Scheme, Seed Enterprise Investment Scheme and Social Investment Tax Relief statistics: 2024

Published 23 May 2024

1. Main points and summary

1.1 Enterprise Investment Scheme

In the tax year 2022 to 2023, 4,205 companies raised a total of £1,957 million of funds under the EIS scheme. Funding has decreased by 15% from 2021 to 2022, the previous year, when 4,455 companies raised £2,297 million.

Investment in 2022 to 2023 saw a reduction down to average levels seen prior to the previous year’s increase, which was itself a rebound from the pandemic.

Around £436 million of investment was raised by 1,280 new EIS companies in 2022 to 2023.

In 2022 to 2023, companies from the Information and Communication sector accounted for £660 million of investment (34% of all EIS investment).

Companies registered in London and the South East accounted for the largest proportion of investment, raising £1,280 million (65% of all EIS investment) in 2022 to 2023.

1.2 Seed Enterprise Investment Scheme

In 2022 to 2023, 1,815 companies raised a total of £157 million of funds under the SEIS scheme. Funding in 2022 to 2023 has decreased by 24% from 2021 to 2022 when 2,295 companies raised £207 million.

Around 1,440 of the companies were raising funds under the SEIS scheme for the first time in 2022 to 2023, representing £137 million of investment.

In 2022 to 2023, companies from the Information and Communication sector accounted for £62 million (39% of all SEIS investment).

Companies registered in London and the South East accounted for the largest proportion of investment, raising £102 million (65% of SEIS investment) in 2022 to 2023.

1.3 Social Investment Tax Relief

In 2022 to 2023, 40 social enterprises received investment through the Social Investment Tax Relief (SITR) scheme, and £5.9 million of funds were raised. Funding has remained consistent from 2021 to 2022, when 40 enterprises raised £5.5 million.

2022 to 2023 was the last year that enterprises could raise investment through SITR due to the closure of the scheme for new investment from April 2023.

1.4 Advance assurance requests

EIS

In 2023 to 2024, 3,130 AAR applications for EIS were received and 2,290 (73%) have been approved so far. The number of applications has decreased from 2022 to 2023 when 3,665 AAR applications were received and 2,960 (81%) approved.

SEIS

In 2023 to 2024, 2,725 AAR applications for SEIS were received and 2,185 (80%) have been approved so far. The number of applications has decreased from 2022 to 2023, when 2,835 AAR applications were received and 2,320 (82%) approved.

SITR

In 2023 to 2024, no AAR applications for SITR were received due to the closure of the scheme for new investment in April 2023.

2. Introduction

2.1 About these statistics

This is a National Statistics publication produced by HM Revenue and Customs (HMRC). It provides information on the number of companies raising funds, the number of subscriptions and the amounts raised through the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). National Statistics are accredited official statistics.

It also includes Official Statistics on social enterprises raising funds through the Social Investment Tax Relief (SITR) scheme. The EIS, SEIS and SITR are 3 of 4 tax-based venture capital schemes that were active in the 2022 to 2023 tax year, the other being the Venture Capital Trust (VCT) scheme.

The current release includes the first estimates for 2022 to 2023. The figures for 2020 to 2021 and 2021 to 2022 include small revisions and minor updates, arising from the receipt of a small number of further EIS1 and SEIS1 forms for these years.

Companies have a period of 3 years after shares are issued to submit a compliance statement. Figures from 2021 to 2022 onwards have been uplifted to take account of late returns submitted by companies. Thus, these figures should be treated as provisional and will be subject to revisions in future publications.

The publication also provides information on the industrial and geographical breakdown of EIS and SEIS companies, the distribution of companies by the amounts of funds raised, and the distribution of investors by the size of their investment.

Section 1 summarises the main statistical points; Sections 3, 4, and 5 presents an overview of the statistics and discusses recent trends. In Section 6, this release includes figures for advance assurance requests received by HMRC. As part of the qualifying process for seeking investment through the schemes, companies can provide a return to HMRC in advance of a share issue to check that it will meet the qualifying conditions for these conditions for these schemes.

The statistical tables are included on the main publication page.

The next release is planned to be in Spring 2025.

People interested in this publication may also be interested in the National Statistics publication on Venture Capital Trusts (VCT).

3. Enterprise Investment Scheme (EIS)

3.1 EIS: Number of EIS companies and amount of investment

The number of companies raising funds and the level of investment have shown similar trends since the EIS was introduced. In 2022 to 2023 the number of companies raising funds decreased to 4,205, raising a total of £1,957 million. This is most likely a result of rising interest rates and some natural reduction following the record breaking year in 2021 to 2022.

Overall, there has been a steady increase in EIS use since 2010, due in part to a sustained period of historically low interest rates, increasing promotion and the involvement of fund managers.

Additionally, users have responded to a series of legislative changes, notably in 2014, 2015 and 2018, introduced to ensure the focus is on investment in early-stage companies that have the intention to grow and develop in the longer term.

In 2020 to 2021, there was a decrease in the number of companies raising funds under the EIS (10%), with the amount raised by EIS companies also dropping by 12% compared to the previous year. The Covid-19 pandemic is likely to have reduced investment through the first 3 quarters of tax year 2020 to 2021. However, funding rebounded in the last quarter of 2020 to 2021 with amounts being raised above pre-pandemic levels for the equivalent period.

This trend continued into 2021 to 2022 where the strong rebound into investment saw both the number of companies raising funds and the total amount raised through the EIS exceeding the previous record limits set in 2017 to 2018 and 2019 to 2020.

Figure 1: Number of companies raising funds and amount raised, 1993-94 to 2022-23

3.2 EIS: New investment

The proportion of investment into new companies compared to that for companies raising further funding has declined since the peaks in 2014 to 2015. This coincides with the investment in renewable energy and the progressive exclusion of these activities from the EIS, as noted above.

In 2018 to 2019, there was a large drop in funds raised by new companies with only 28% of funding being raised by companies using the EIS for the first time. This trend has continued with 22% of the total amount being raised by new EIS companies in 2022 to 2023. This is likely to be due to the introduction of the risk-to-capital condition which places further restrictions on the qualification of investment under the EIS.

These restrictions were introduced to ensure that investment under the EIS is genuinely at risk and is made with the intention of providing long-term growth and development of the company’s trade. Those low-risk and limited growth investment arrangements targeted by the new condition typically involved the creation of new companies raising funds for the first time.

A proportion of this investment was expected to be reinvested elsewhere and, with the new incentives to invest in knowledge intensive companies, this has resulted in increased investment in these companies.

Figure 2: Amount of funds raised under the EIS by new companies and old companies, 1993-94 to 2022-23

3.3 EIS: Industry Sector

In 2022 to 2023, companies from top 4 sectors (the Manufacturing, the Wholesale and Retail Trade, Repairs, the Information and Communication, the Professional, Scientific and Technical sectors) together accounted for around £1,447 million of investment and made up 75% of all EIS Investment. This proportion is a slight increase compared with 2021 to 2022.

Figure 3 compares the proportion of investment across sectors, by amount raised under the EIS between 2021 to 2022 and 2022 to 2023. The trends for the 2 years are similar, with an increase in the Professional, Scientific and Technical sector but a decrease in the Financial and Insurance sector.

Figure 3: Comparison between amounts of funds raised under the EIS by different industry sectors, 2021-22 to 2022-23

The sector breakdowns in this section are based on the Standard Industrial Classification (SIC) 2007.

3.4 EIS: Size of investment per company

The distribution of the number of companies raising funds under the EIS by investment size differs from the distribution of amount of funds raised by size of investment. In 2022 to 2023, around 4% of EIS companies raised 27% of all investment (investments over £2 million). It is likely that the risk-to-capital condition will have affected these higher investment categories in particular.

Since 2012 to 2013 the annual limit on investment has been £5 million. From 2018 to 2019 onwards this has been increased to £10 million for KICs.

Figure 4: Distribution of the proportion of funds raised under the EIS by investment band, 2022 to 2023

3.5 EIS: Geographical region of company registration

The proportion of the amount of investment in companies with a registered office in London and the South East was 65% in 2022 to 2023. This proportion is similar to recent years.

Figure 5: Distribution of the number of EIS companies and amount of investment by location, 2022 to 2023

3.6 EIS: Investors claiming Income Tax relief under EIS

The number of investors claiming Income Tax relief on Self Assessment forms under the EIS has decreased, from 44,810 in tax year 2021 to 2022 to 40,485 in 2022 to 2023.

The total tax relief claimed under EIS decreased overall in 2022 to 2023 and there was a decrease in the total number of investors (10%).

In 2018 to 2019, new limits were introduced for investments in KICs. These allow individuals to invest up to £2 million in a year if they are investing in a KIC. There were 50 investments of between £1 million and £2 million in 2022 to 2023, contributing £81 million of investment. With the higher limit available, investments of over £500,000 comprised 18% of the total amount of EIS investment raised on which claims were made in 2022 to 2023.

Figure 6: Proportion of investors and amount of investment, by size of investment (investment on which Income Tax relief was claimed), 2022-23

Total figures provided on the amount of investment on which Income Tax relief was claimed are not directly comparable with the figures on the amount of investment reported by companies. Some investors may choose to offset the tax liability against the previous year. A small amount of relief would also be claimed through the PAYE system; this is assumed to relate to about 5% of total EIS investment.

4. Seed Enterprise Investment Scheme

4.1 SEIS: Number of SEIS companies and amount of investment

In 2022 to 2023, the number of companies raising investment under SEIS was 1,815, compared to 2,295 in the previous year. The amount raised by these companies decreased by 24% to £157 million compared to £207 million in the previous year. It is likely that increasing interest rates have had a larger impact on SEIS investment than other schemes due to the younger higher risk nature of the companies raising funds through the scheme and investors possibly switching to fixed income investments which offered higher or more stable rates of return.

The risk-to-capital condition introduced a requirement for growth and development to the SEIS for the first time in 2018 to 2019, and it is expected that this will have had a short-term impact before the industry adjusted.

Figure 7: Number of companies raising funds and amount raised, 2012-13 to 2022-23

4.2 SEIS: New investment

The number of new companies raising SEIS funds in tax year 2022 to 2023 decreased by around 22% from the previous year, and the amount raised by these companies also decreased by 24%.

Figure 8: Amount of funds raised by new and old SEIS companies, 2012-13 to 2022-23

4.3 SEIS: Industry sector

In 2022 to 2023, companies from just one sector (the Information and Communication) accounted for £62 million of investment, which makes up 39% of the amount of SEIS investment received. The next 3 largest sectors (the Professional, Scientific and Technical, the Manufacturing, the Wholesale and Retail Trade, Repairs sectors) together account for 35% of investment.

The proportion of SEIS investment by industry sector in 2022 to 2023 has remained consistent in the Information and Communication sector and increased in the Manufacturing sector, compared to the previous year.

Figure 9: Comparison between the proportion of funds raised under the SEIS by different industry sectors, 2021-22 to 2022-23

4.4 SEIS: Size of investment per company

Most companies receive investments of over £50,000 through the SEIS (67% in 2022 to 2023). In 2022 to 2023, around 41% of companies raised amounts over £100,000, compared to 44% in 2021 to 2022.

Figure 10: The percentage distribution of funds raised under the SEIS by investment band, 2022-23

4.5 SEIS: Geographical region of company registration

The largest proportion of funds raised under the SEIS were through companies with a registered office in London and the South East. In 2022 to 2023, these regions accounted for 65% of the total SEIS investment (Figure 11), which is slightly lower than the previous year (67%).

Figure 11: The percentage distribution of the number of SEIS companies and amount of investment by location, 2022-23

4.6 SEIS: Investors claiming Income Tax relief under SEIS

In 2022 to 2023, 8,065 investors claimed Income Tax relief on Self Assessment forms for the SEIS, compared to 9,900 investors in 2021 to 2022. The amount of relief claimed also decreased by 10%, which is lower than the 24% decrease in funds raised by companies in 2022 to 2023.

Most investors claiming the relief invested £10,000 or less into qualifying SEIS companies (55%).

Investments of over £25,000 contributed 63% of the total amount of SEIS investment raised on which claims were made, which is broadly consistent with 2021 to 2022 (62%).

Figure 12: Proportion of SEIS investors claiming Income Tax relief and amount of investment by investment band, 2022-23

5. Social Investment Tax Relief

5.1 Number of social enterprises and amount of investment

In 2022 to 2023, 40 social enterprises received investment through the Social Investment Tax Relief (SITR) scheme and £5.9 million of funds were raised. Funds are raised through equity investment (shares) and debt investment (loans). Funding has remained consistent compared with the previous year, where 40 social enterprises raised £5.5 million.

In 2017, the amount of investment younger qualifying social enterprises could raise through SITR was increased to £1.5 million. At the same time, restrictions on employee numbers and qualifying trades were introduced to make sure the scheme continued to comply with state aid requirements and was well targeted. Among the amendments was the exclusion of activities such as asset leasing, lending, and operating nursing and residential care homes.

2022 to 2023 was the last year during which enterprises could raise investment through SITR due to the closure of the scheme for new investment in April 2023.

Figure 13: Number of companies raising funds and amount raised, 2014-15 to 2022-23

6. Advance assurance requests

Companies considering using the EIS, SEIS or SITR can obtain advance assurance (AA) that HMRC will regard the shares to be issued as satisfying the requirements of the scheme.

These statistics show the number of companies seeking advance assurance, the number of AAR applications received, and, of these, how many were approved, rejected, or not pursued further. Statistics are presented from 2006 to 2007 for the EIS, 2012 to 2013 for the SEIS and 2014 to 2015 for SITR.

6.1 EIS: Number of AARs received and outcomes

In 2023 to 2024, HMRC received 3,130 advance assurance applications for the EIS, a decrease of 535 from 2022 to 2023. A number of the applications for 2023 to 2024 are still being processed, but as of March 2024, 73% have been approved so far. Of the 3,665 applications received in 2022 to 2023, 81% have been approved (Figure 14).

Figure 14: Number of EIS advance assurance applications received, approved and rejected, 2006-07 to 2023-24

6.2 SEIS: Number of AARs received and outcomes

In 2023 to 2024, HMRC received 2,725 SEIS AAR applications, a decrease of 110 from 2022 to 2023. A number of the applications for 2023 to 2024 are still being processed, but as of March 2024, 80% of applications have been approved. In 2022 to 2023 there were 2,835 SEIS AAR applications and of these 2,320 (82%) have been approved.

Figure 15: Number of SEIS advance assurance applications received, approved and rejected, 2012-13 to 2023-24

6.3 SITR: Number of AARs received and outcomes

There are no AAR applications for 2023 to 2024 due to the closure of SITR to new investment in April 2023.

In 2021 to 2022, there were 40 SITR AAR applications and, of these, 20 (50%) have been approved.

In 2022 to 2023, 15 out of 25 applications for 2022 to 2023 have been approved (60%).

Figure 16: Number of SITR advance assurance applications received, approved and rejected, 2014-15 to 2023-24