Admin burden eased in EIS application process
These changes are just one part of a wider suite of reforms to the EIS fund structure which will be introduced from April 2020.
However, there are some changes whose difference can be felt now. The Enterprise Investment Scheme Association (EISA) has been working with HMRC to update the procedures for companies seeking an advance assurance or submitting a compliance statement for venture capital schemes. The aim is to reduce the amount of administrative burden they present.
The main changes include:
- New mandatory digital forms are now available for advance assurance applications under EIS, SEIS and venture capital trust (VCT) investments.
- HMRC has also made the form for compliance statements available in digital format. Initially, this is a fairly basic fillable PDF, but over time it will become more interactive and user-friendly.
- ‘Wet’ signatures on printed compliance certificates are no longer required. Instead, a Unique Investment Reference (UIR) will be introduced for investors to use when they claim tax relief
- HMRC has also made provisions for compliance statements and supporting documents to be submitted by email, helping to speed the process even further.
Together, these changes mean companies are able to complete and issue certificates to investors in whatever manner suits them – all good news for investors tired of jumping through onerous administrative hoops in order to submit an EIS application. You can read more about the changes on the HMRC website
“This will greatly benefit our future investee companies by digitalising and speeding up the advance assurance process,” explains founding partner of Enterprise Investment Partners, Christian Elmes.
“HMRC hopes this will cut down most application turnarounds to under 14 days, a considerable reduction from the current situation where responses can take anything between 28 days and three months.”
“There are also significant changes for investors in that now the EIS3 application process will benefit from HMRC’s use of electronic signatures via a UIR for each qualifying venture capital share issue. That means forms can be digitised, completed and shared faster with investors online, replacing the current drawn-out paper process.”