Income Tax is a fact of life for many of us across the UK, but more and more savvy Brits are realising every day that this load can be significantly lightened by investing in UK companies through the EIS scheme.

Put simply, this scheme gives Brits looking to streamline their Income Tax bill a chance to do so when they invest their money in an eligible enterprise. As a welcome bonus, there are other tax benefits up for grabs, as well as the potential profits resulting from the success of these businesses.

Today, we’re taking a closer look at EIS investments, helping you to decide whether this is the right investment avenue for you. After that, we’re unveiling our all-new whitepaper - providing you with a more detailed guide to the obvious (and not-so-obvious) benefits of EIS.

What is EIS?

The successor to the Business Expansion Scheme, the Enterprise Investment Scheme (EIS) was originally launched by HMRC in 1994 in an aim to provide a way for British-based businesses to attract investors, while simultaneously offering Income Tax relief to those who choose to invest. As unquoted trading companies can regularly struggle to secure the funding they need to fuel growth, this scheme matches aspiring investors with business owners who need a financial injection to take their enterprise to the next level.

If you’re looking for ways to lighten your tax bill, the EIS scheme allows individuals to invest a maximum of £1,000,000 each tax year in exchange for a suite of generous tax benefits. Whether you’re a long-time investor or considering your first venture, this scheme could be just the thing.

Benefits of EIS investment

Generally accepted as the largest benefit provided by the scheme, Income Tax relief on EIS equals 30%, so for every £1000 you invest, HMRC give you £300 in tax relief. And if that wasn’t enough, you also benefit from a Capital Gains Tax exemption on any earnings from your shares (as long as you hold them for at least three years). There are additional benefits of the scheme which we’ve summarised on our dedicated EIS tax page .

EIS tax relief alone may be enough to tempt you - but it’s worth remembering the value of the stake you’ll hold in the business itself. As your investment is used to help the company reach its next stage of growth, the value of your shares may increase over time. And if you’re interested in giving a UK enterprise this exciting chance to grow and evolve, the EIS scheme is perfect for you.

If you’re considering an EIS investment now that you’ve learned the basics of this government scheme, the next step is to read our new whitepaper. Rather than stating the obvious, this resource provides all the less obvious know-how you’ll need to make an informed decision.

Click the cover to get one step closer to investing in a company that qualifies for the Enterprise Investment Scheme (and reaping all the benefits that come with it).