Statistics on Companies raising funds using SEIS and EIS

Oct 13, 2018 | Publisher: Techcelerate Ventures | Category: Business & Economics |  | Collection: Investments | Views: 7 | Likes: 1

Coverage: United Kingdom Theme: The Economy Released: 31 October 2017 Next Release: Spring 2018 Frequency of release: Bi-annual Media contact: HMRC Press Office (Business) 03000 585028 Out-of-hours: 07860 359544 Statistical contacts: Louise Bradford (EIS & SEIS) Louise.Bradford@hmrc.gsi.gov.uk Akash Patel (SITR) Akash.Patel@hmrc.gsi.gov.uk Dominica Parry Dominica.Parry@hmrc.gsi.gov.uk KAI Direct Business Taxes Room 2/42 HM Revenue and Customs 100 Parliament Street London SW1A 2BQ Website: https://www.gov.uk/government/org anisations/hm-revenue- customs/about/statistics Enterprise Investment Scheme Seed Enterprise Investment Scheme and Social Investment Tax Relief October 2017 Statistics on Companies raising funds 2 Contents Section 1: Introduction 3 About these statistics 3 Who might be interested in these statistics? 4 Section 2: Key points and summary 5 Section 3: Commentary 6 3.1 Enterprise Investment Scheme 6 EIS: Number of EIS companies and amount of investment 6 EIS: New investment 7 EIS: Industry sector 8 EIS: Size of investment per company 10 EIS: Geographical region of company registration 11 EIS: Investors claiming Income Tax relief under EIS 12 3.2 Seed Enterprise Investment Scheme 13 SEIS: Number of SEIS companies and amount of investment 13 SEIS: Industry sector 14 SEIS: Size of investment per company 15 SEIS: Geographical region of company registration 16 SEIS: Investors claiming Income Tax relief under SEIS 17 3.3 Social Investment Tax Relief 18 SITR: Number of social enterprises and amount of investment 18 SITR: Advance Assurance requests 18 Section 4: Background information 19 Policy background 19 Data sources 20 Methodology and reliability of the estimates 21 Revisions to previously published tables 21 Industry sector classification 22 Key differences in breakdowns by TCN and SIC 2007 classifications 22 Planned developments and changes 23 User engagement 23 UKSA Assessment 24 Contact points 25 Annex A: Statistical reference tables 26 3 Section 1: Introduction About these statistics This is a National Statistics publication produced by HM Revenue & Customs (HMRC). It provides information on the number of companies raising funds, number of subscriptions and amounts raised through the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). It also includes Official Statistics on social enterprises raising funds through the Social Investment Tax Relief (SITR) scheme which are being published for the first time. The EIS, SEIS and SITR are three of four tax-based Venture Capital schemes, the other being the Venture Capital Trust (VCT) scheme1. This release includes updated EIS and SEIS estimates for 2015-16 for the statistics published in April 2017. The figures for previous years include small revisions and minor updates, arising from the receipt of a small number of further EIS1 and SEIS1 forms for these years. The publication also provides information on the industrial and geographical breakdown of EIS and SEIS companies, the distribution of companies by the amount of funds raised, and the distribution of investors by the size of their investment. These figures are updated annually. Statistics on companies raising funds, subscriptions and amounts raised are based on the EIS1, SEIS1 and SITR1 returns received so far. Statistics on investors using the EIS and SEIS schemes are derived from Self Assessment tax returns. Section 2 summarises the key statistical points and Section 3 presents an overview of the statistics and discusses recent trends. Section 4 provides background information, including a link to further detail on the policy background and key policy changes, and information on the data sources and methodology used to derive these statistics. Copies of the statistical tables are included in Annex A. The April 2017 release included the first published statistics for EIS and SEIS Advanced Assurance Requests (AARs) with data up to 2016-17. These statistics will next be updated as part of the Spring 2018 release. These National Statistics are produced to the professional standards set out in the Code of Practice for Official Statistics (2009)2. For more information on Official and National Statistics and the governance of statistics produced by public bodies, please see the UK Statistics Authority website: www.statisticsauthority.gov.uk HMRC Official and National Statistics can be found on the gov.uk website: https://www.gov.uk/government/organisations/hm-revenue-customs/about/statistics 1 Further information on the EIS and SEIS schemes is included in Section 4: Background Information. 2 http://www.statisticsauthority.gov.uk/assessment/code-of-practice/ 4 Who might be interested in these statistics? This publication is likely to be of interest to policy makers in government, academics, research organisations, the media, the Venture Capital associations and companies raising funds under the EIS, SEIS and SITR schemes. It will be of particular interest to investors investing in Venture Capital schemes. People interested in this publication may also be interested in the National Statistics publication Venture Capital Trusts (VCT): https://www.gov.uk/government/collections/venture-capital-trusts-statistics We continue to welcome feedback on this release and the range of statistics presented. Contact details are included within Section 4. 5 Section 2: Key points and summary Companies have several years after shares are issued to submit a compliance statement (the EIS1, SEIS1 and SITR1 forms). The figures for 2015-16 are therefore provisional and are likely to be revised upwards in future as more forms are received by HMRC. Enterprise Investment Scheme Since the Enterprise Investment Scheme (EIS) was launched in 1993-94, 26,355 companies have received investment and almost 16.2 billion of funds have been raised. In 2015-16, 3,470 companies raised a total of 1,888 million of funds under the EIS scheme. In 2014-15, 3,370 companies raised 1,929 million of funds. In 2015-16, the 1,645 companies raising funds for the first time under the EIS scheme raised a total of 997 million of investment. In 2015-16, companies from the Business Services sector accounted for over 800 million of investment (more than 40% of all EIS investment). London and the South East accounted for the largest proportion of investment with companies registered in these regions receiving 67% of investment in 2015-16. Seed Enterprise Investment Scheme In 2015-16, 2,360 companies received investment through the Seed Enterprise Investment Scheme (SEIS) and 180 million of funds were raised. This is very similar to 2014-15, when 2,365 companies raised a total of 180 million. Over 1,800 of these companies were raising funds under SEIS for the first time in 2015-16, representing 154 million in investment. In 2015-16, companies from the Hi-tech and Business services sectors made up 68% of the amount of SEIS investment received. Social Investment Tax Relief In 2015-16, 25 social enterprises received investment through the Social Investment Tax Relief (SITR) scheme and 2.3 million of funds were raised. Since SITR was launched in 2014-15, up to 2015-16, 25 social enterprises have raised funds of 2.8 million through the scheme. Since 2014-15, 260 SITR advance assurance request (AAR) applications have been received. In 2016-17 there were 170 applications, of which 120 (69%) were approved. 6 Section 3: Commentary 3.1 Enterprise Investment Scheme (EIS) EIS: Number of EIS companies and amount of investment Since EIS was launched in 1993-94, 26,355 individual companies have received investment through the scheme, and 16.2 billion of funds have been raised. The data used here comes from EIS Table 8.1 in Annex A. The numbers of companies raising funds and the level of investment have shown similar trends since EIS was introduced (Figure 1). However, in 2015-16 the number of companies raising funds increased to 3,470 while the amount raised fell slightly to 1,888 million. Note that the 2015-16 figures are likely to be revised upwards as more returns are received by HMRC, so this trend may change the next time the figures are published. Figure 1: (a) Amounts of funds raised through EIS, 1993-94 to 2015-16. Figure 1: (b) Number of companies raising funds under EIS, 1993-94 to 2015-16. Source: EIS1 forms 7 From 2000-01, there was a gradual decrease in the amount of investment up to 2004-05 when investment started increasing again. From 2007-08 to 2008-09, there was a sharp decrease in the amount of investment, most likely due to the economic recession and to additional eligibility restrictions for qualifying companies (from 19 July 2007, limits on company investment of 2 million and the number of employees, of fewer than 50 employees, were introduced). The change in Income Tax relief from 20% to 30% in 2011-12 and the introduction of the Feed in Tariffs (FiTs) initiative3 from April 2010 (resulting in large amounts of investment into the renewable energy sector) both attracted EIS investment. In 2012-13 most trades attracting FiTs were excluded from eligibility for EIS and companies benefiting from alternative DECC subsidies have been excluded since July 20144. The expansion of venture capital schemes in 2012-13, with an increase in the annual EIS investment limit for companies to 5 million, attracted significant investment. The amount of funds raised almost doubled in the period from 2012-13 to 2014-15. Investment fell slightly in 2015-16, although these figures are provisional and are likely to be revised upwards in future as more returns are received by HMRC. EIS: New investment The majority of investment through the scheme (58%) since the inception of EIS has been investment into companies raising EIS funds for the first time. In 2015-16, 53% of funding was raised by companies using EIS for the first time. Figure 2: Amount of investment received by new companies through EIS and by companies who received investment under EIS previously, from 1993-94 to 2015-16. Source: EIS1 forms 3 Introduced by the Department of Energy and Climate Change. 4 Excluding those generating energy by way of anaerobic digestion or hydroelectric power and certain community organisations. For further information FiTs and other DECC subsidies, please see the Office of Gas and Electricity Markets website: https://www.ofgem.gov.uk/environmental-programmes 8 EIS: Industry sector5 In 2015-16, companies from the Business services and Hi-tech6 sectors together accounted for over 1.2bn of investment and made up 68% of all EIS investment (Figure 3). In 2014-15, these sectors accounted for 53% of all EIS investment (1.0bn). In 2015-16, companies from the Business services sector accounted for over 800 million of investment (over 40% of all EIS investment). The highest number of companies receiving EIS investment in 2015-16 were in the Business services and Hi-tech sectors (1,240 and 1,150 companies respectively). These sectors represent 69% of the total number of companies receiving investment through EIS. Figure 3: The percentage distribution of EIS investment and number of EIS companies, by industry sector in 2015-16. Source: EIS1 forms *Other services sector includes: recreational services, other medical and educational services, real estate, social and community services and others. ** Hi tech sector includes: research and development, instrument engineering, some chemicals and computer consultancy. 5 Trade Classification Numbers (TCNs) are used to identify the type of trade carried out by the company. It should be taken into account that the most recent TCN data available have been used and some companies could have changed their trade since submitting their EIS1 forms. 6 'Hi Tech' Companies is not a category identified by the Trade Classification system. This category includes selected companies from other industry groups involved in activities such as research and development, chemicals and computer consultancy. 9 Figure 4, below, provides a comparison of the amount of investment raised under EIS between 2014-15 and 2015-16. The largest increase was in Business services where the amount of funds raised increased by 135 million between 2014-15 and 2015-16. The largest decrease was in Energy and Water Supply companies where the amount of funds raised decreased by 233 million between 2014-15 and 2015-16. This is likely to be related to the policy changes excluding energy generation from venture capital schemes, some of which came into effect during 2015-16. Figure 4: Comparison between amounts of funds raised under EIS by different industries in 2014-15 and 2015-16. Source: EIS1 forms *Other services sector includes: recreational services, other medical and educational services, real state, social and community services and others. ** Hi tech sector includes: Research and development, instrument engineering, some chemicals, computer consultancy and others. The statistics above are based on the data in EIS Table 8.2 in Annex A using HMRC's Trade Classification Number (TCN) system. Data by Standard Industrial Classification (SIC) sector is presented as EIS Table 8.2a in Annex A. This shows that the 'Professional, Scientific and Technical' and 'Information and Communication' sectors had the highest levels of EIS investment, together accounting for 810 million (43%) of investment in 2015-16. 10 EIS: Size of investment per company The distribution of the number of companies raising money under EIS by investment size differs from the distribution of amount of funds raised by size of investment (Figure 5). A large proportion of companies receive relatively small investments, with 44% (1,540) of companies receiving investments of 150,000 or less in 2015-16. This is a similar proportion to recent years. At the same time, in 2015-16, 47% (888m) of the amount of funds is concentrated in investments above 2m with 25% (466m) going to investments between 4m and 5m. The annual EIS investment limit for any company was increased from 2m to 5m in 2012-13. Figure 5: Distribution of the proportion of funds raised under EIS (number of companies and amount raised) by upper limit of size of investment (2015-16). Source: EIS1 forms The data used in this section comes from EIS Table 8.3 in Annex A. 11 EIS: Geographical region of company registration The proportion of the amount of investment in companies registered in London and the South East was 67% in 2015-16 (Figure 6). This proportion is similar to recent years. The geographical distribution of EIS investments is based on the registered address of the company raising funds. This address may place the company in a different region from the region in which the business activity is carried and, therefore, a degree of caution should be exercised in the use of this data. Figure 6: Distribution of EIS investment and number of EIS companies based on the registered address of the company (2015-16). Source: EIS1 forms The data used in this section comes from EIS Table 8.4 in Annex A. 12 EIS: Investors claiming Income Tax relief under EIS The number of investors claiming Income Tax relief on Self Assessment forms under EIS increased from 32,210 in 2014-15 to 32,770 in 2015-16. The majority of the investors claiming Income Tax relief tend to invest smaller amounts of money into companies qualifying for EIS (Figure 7). In 2015-16, 80% of EIS investors made a claim for tax relief in respect of an investment of less than 50,000 (Figure 7). This was a slight increase from 2014-15 when 78% of investors made a claim on an investment of less than 50,000. The number of investors claiming relief for investments of up to 5000 has increased by 18% from 8,490 investors in 2014-15 to 10,040 in 2015-16, a possible result of the increasing use of crowdfunding platforms. Investors were able to claim Income Tax relief on an investment of up to 1m from 2012-13, compared with a previous limit of 500,000. Investments of 500,000 to 1m contributed 18% of the total amount of EIS investment raised on which claims were made in 2015-16. Figure 7: Proportion of investors and amount of investment, by size of investment (investment on which Income Tax relief was claimed in 2015-16). Source: Self Assessment Returns The data used in this section comes from Table 8.5 in Annex A. Total figures provided in Table 8.5 on the amount of investment on which Income Tax relief was claimed are not directly comparable with the figures in the Table 8.1 on the amount of investment reported by companies. Some investors may choose to offset the tax liability against the previous year. Also, a small amount of relief would be claimed through the PAYE system which is assumed to relate to about 5% of total EIS investment. 13 3.2 Seed Enterprise Investment Scheme SEIS: Number of SEIS companies and amount of investment In 2015-16, data show that 2,360 companies received investment through the Seed Enterprise Investment Scheme (SEIS) and 180 million of funds were raised. Over 1,800 of these companies were raising funds under SEIS for the first time, raising a total of 154 million in investment. The average investment per company under SEIS in 2015-16 was around 76,000. The total amount of SEIS investment in 2015-16 was 0.5 million higher than in the previous year. Since SEIS was launched in 2012-13, 6,665 individual companies have received investment through the scheme and 621 million in investment has been raised. The data used in this section comes from SEIS Table 8.11 in Annex A. Figure 8: Amount of investment received by new companies through SEIS and by companies who received investment under SEIS previously, for 2012-13 to 2015-16. Source: SEIS1 forms 14 SEIS: Industry sector7 In 2015-16, companies from the Hi-tech8 and Business services industries made up 69% of the amount of SEIS investment received (Figure 9). Companies from the Business services sector increased the amount of investment funds raised under SEIS from 53 million (29%) in 2014-15 to 64 million (36%) in 2015-16. The data used in this section comes from SEIS Table 8.12 in Annex A. Figure 9: The percentage distribution of SEIS investment by industry sector in 2014-15 and 2015-16. Source: SEIS1 forms *Other services sector includes: recreational services, other medical and educational services, real state, social and community services and others. ** Hi tech sector includes: Research and development, instrument engineering, some chemicals, computer consultancy and others. 7Trade Classification Numbers (TCNs) are used to identify the type of trade carried out by the company. It should be taken into account that the most recent TCN data available have been used and some companies could have changed their trade since submitting their EIS1 forms. 8'Hi Tech' Companies is not a category identified by the Trade Classification system. This category includes selected companies from other industry groups involved in activities such as research and development, chemicals and computer consultancy. 15 SEIS: Size of investment per company The majority of companies receive investments of over 50,000 through SEIS, with 55% of companies receiving investment of over 50,000 in 2015-16 (Figure 10). This is a similar proportion to 2014-15. Investments of over 50,000 contributed 85% of the total amount of SEIS investment raised. The data used this section comes from SEIS Table 8.13 in Annex A. Figure 10: Distribution of the proportion of funds raised under SEIS (number of companies and amount raised) by upper limit of size of investment (2015-16). Source: SEIS1 forms 16 SEIS: Geographical region of company registration The largest proportion of funds raised through SEIS was raised by companies registered in London and the South East. In 2015-16, these regions accounted for 66% of SEIS investment, a similar proportion to the previous year. The geographical distribution of SEIS investments is based on the registered address of the company raising funds. This address may place the company in a different region from the region in which the business activity is carried. Therefore, caution should be exercised in interpreting this data. The data used in this section comes from SEIS Table 8.14 in Annex A. Figure 11: Distribution of SEIS investment and number of SEIS companies based on the registered address of the company (2015-16). Source: SEIS1 forms 17 SEIS: Investors claiming Income Tax relief under SEIS In 2015-16, 8,930 investors claimed Income Tax relief on Self-Assessment forms for SEIS, compared to 9,025 investors in 2014-15. The majority of the investors claiming the relief invested 10,000 or less into qualifying SEIS companies (58% of investors). The number who invested 500 or less increased by 26% from 780 investors in 2014-15 to 985 in 2015-16, a possible result of the increasing use of crowdfunding platforms. Investments of over 25,000 contributed 61% of the total amount of SEIS investment raised on which claims were made. The data used in this section comes from SEIS Table 8.15 in Annex A. Figure 12: Proportion of the number of investors and amount of investment claimed in 2015-16. Source: Self Assessment Returns Total figures provided in Table 8.15 on the amount of investment on which Income Tax relief was claimed are not directly comparable with the figures in the Table 8.11 on the amount of investment reported by companies. Some investors may choose to offset the tax liability against the previous year. Also, a small amount of relief would be claimed through the PAYE system which is assumed to relate to about 5% of total SEIS investment. 18 3.3 Social Investment Tax Relief SITR: Number of social enterprises and amount of investment In 2015-16, data show that 25 social enterprises received investment through the Social Investment Tax Relief (SITR) scheme and 2.3 million of funds were raised. This includes funds raised through equity investment (shares) and debt investment (loans). The data can be found in SITR Table 8.21 in Annex A. Since SITR was launched in 2014-15, up to 2015-16, 25 social enterprises have received investment through the scheme. This number is not included in Table 8.21, but it represents the number of unique social enterprises (enterprises which received investment in more than one year have only been counted once). These enterprises have raised a total of 2.8 million in funds. SITR: Advance Assurance requests In 2016-17 there were 170 SITR advance assurance request (AAR) applications and, of these, 120 (69%) have been approved. In total since 2014-15, 260 SITR AAR applications have been received, of which 180 (69%) have been approved. The data can be found in SITR Table 8.21a in Annex A. 19 Section 4: Background information Policy background The Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and Social Investment Tax Relief (SITR) are three of the four tax-based venture capital schemes, the other being the Venture Capital Trust (VCT) scheme. The EIS was introduced in 1994 to help smaller, higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who purchase new full-risk ordinary shares in those companies. The SEIS was introduced in 2012 to complement EIS and is intended to recognise the particular difficulties which very early stage companies face in attracting investment by offering tax relief at a higher rate than that offered by EIS. The SITR was introduced in 2014 to help social enterprises raise money for their business activities by offering tax relief to investors. The investment may be in the form of equity investment (shares) or debt investment (loans). An amendment to tax-advantaged venture capital schemes, including EIS and SEIS, was published at Summer Budget 2015. Further information on these changes is available here: https://www.gov.uk/government/publications/income-tax-amendments-to-tax-advantaged- venture-capital-schemes Changes to exclude energy generation from the EIS, SEIS and SITR schemes were announced at Autumn Statement 2015: https://www.gov.uk/government/publications/income-tax-exclusion-of-energy-generation- from-venture-capital-schemes Changes to SITR were announced at Autumn Statement 2016 to increase the investment limit and improve the targeting of the scheme. Further information is available here: https://www.gov.uk/government/publications/income-tax-enlarging-social-investment-tax- relief The Official and National Statistics for the VCT scheme can be found here: https://www.gov.uk/government/collections/venture-capital-trusts-statistics 20 Data sources The statistics in this release are compiled using data collected from companies' EIS1, SEIS1 and SITR1 returns. All figures in this release are based on data extracted in September 2017 (EIS, SEIS) and October 2017 (SITR). The returns, also known as 'compliance statements', are statutory declarations that the company is compliant with the conditions of the EIS, SEIS or SITR scheme. The data cover all EIS1, SEIS1 and SITR1 returns received by HMRC and approved by the Small Company Enterprise Centre (SCEC) that administers the schemes. The SCEC decides if a company and a share issue qualifies. Companies have to submit an EIS1/SEIS1 form for each share issue where EIS or SEIS relief is to be claimed. The EIS1 and SEIS1 forms include details of investors who have indicated they will be claiming EIS/SEIS relief and the amount invested. The forms also include details of the date the shares were issued; these dates are used in the production of the statistics to record the investments within particular tax years. Social enterprises have to submit similar information under the SITR scheme using the SITR1 form. Income Tax Self Assessment returns are used to collect EIS and SEIS investor level information. Some investors will invest in both schemes in the same tax year. This information will not cover investors making Income Tax relief claims through other systems (e.g. PAYE) or not making any claims. Data on SITR Advanced Assurance Requests (AARs) is collected by the SCEC and compiled from social enterprises' AAR applications. The data cover all the SITR AAR applications handled by the SCEC. The SCEC advises enterprises considering using SITR about whether HMRC will regard their planned share issues, loans and business activities as satisfying the requirements of the scheme. SITR AAR data was extracted in October 2017. Initial statistical checks carried out on the data include: Plausibility checking that the amount of the investment has a realistic value. Any record showing a very high amount is referred back to SCEC, which will check on these cases; Checking that the companies correspond to the company registration number. In case of inconsistencies, the correct information is retrieved from Companies House Database or SCEC; and Checking all the duplicate records, i.e. individual companies records with the same issue data and amount of investment are checked with SCEC. Once the EIS1/SEIS1/SITR1 forms data have been extracted from the analysis database: Any significant changes in figures from one statistical release to the next are investigated. 21 Methodology and reliability of the estimates Tables 8.1 to 8.4, tables 8.11 to 8.14 and table 8.21 include every case captured via EIS1, SEIS1 and SITR1 forms respectively. The Self Assessment tables (EIS Table 8.5 and SEIS Table 8.15) include every case captured via Self Assessment returns. The SITR AAR table includes all AAR cases handled by the SCEC. As no sampling is necessary, sampling error is not an issue. Sources of error in the published statistics include: The EIS/SEIS/SITR companies have a period of several years after shares are issued to submit a compliance statement. Therefore, there are a small number of returns submitted later which add to the existing data and can therefore result in minor revisions to previously published figures. Accordingly, some revisions have been made to EIS/SEIS figures prior to 2015-16. This release provides figures on the number of investors and the amount claimed through Self Assessment in value terms. The EIS and SEIS investors can claim Income Tax relief up to five years after the 31 January following the tax year in which the investment was made. Therefore, in the next year's publication, a small number of late claims will result in minor revisions to previously published figures, particularly to the provisional figures for 2015-16. Data capture errors: companies may make errors entering their information on the EIS1/SEIS1/SITR1 paper forms. The data are subsequently entered onto HMRC's systems manually. This is another point at which data may be altered due to human error or software errors. There is a risk that errors involve very large investment amounts. To mitigate this, checks are carried out and any incorrect large values which are detected are investigated (and potentially altered) in the analysis database before the statistics are produced. An automated data entry to HMRC's system is being introduced and should reduce the number of these types of errors in future. We will provide notification in the appropriate release when this has been used in the creation of the estimates. Revisions to previously published tables Companies' funds raised are subject to revision and, although the majority of assessments are finalised within three years after shares are issued, there are exceptional cases which can take much longer. As a result, there is no specific point at which claims for the latest years can be considered as complete or final. In practice, the statistics are first published as provisional one year after the tax year being presented and subsequently revised in the following releases of the statistics. However, where the revision to a year is particularly small and would lead to the potential disclosure of individual companies, these revisions will be suppressed (based on our standard approach to statistical disclosure control) until a subsequent release. 22 Revisions to the published Self Assessment returns data are not routinely made until the following year's release. Typically, the only revisions are to the most recent year's figures reflecting returns submitted later. Industry sector classification The industry breakdown in Table 8.2 has historically been based on HMRC's Trade Classifications Number (TCN) codes. Classification based on TCNs is outdated. The UK Standard Industrial Classification 2007 (SIC 2007) is a more current, detailed and commonly used system. The conversion to SIC 2007 will bring EIS and SEIS statistics more into line with other HMRC statistics and will make them more widely comparable with other sources of statistics by industry. Previous releases of these statistics have presented experimental versions of the EIS and SEIS tables with an industry breakdown based on Standard Industry Classification 2007 (SIC 2007). In this release, we present the SIC 2007 breakdowns in Annex A as Official Statistics. Companies with an unknown SIC 2007 code are generally new companies that have not filed a Corporation Tax (CT) return at the time they have submitted their EIS1/SEIS1 forms. Work is ongoing to refine the methodology to allocate SIC 2007 codes to EIS and SEIS companies. For more information on SIC 2007 codes please see: http://www.ons.gov.uk/ons/guide-method/classifications/current-standard- classifications/standard-industrial-classification/index.html Key differences in breakdowns by TCN and SIC 2007 classifications TCN codes are broadly based on the 1992 Standard Industrial Classification. Changes in the economy since that time, including rapid growth in the technology sector, mean that newer companies' activities are increasingly less likely to be well mapped in the TCN codes. The TCN codes are assigned by HMRC staff based on their knowledge of companies' activities. The SIC 2007 codes used in this release come from the Inter-Departmental Business Register (IDBR), which uses Companies House data as one source, or directly from Companies House data. Companies House SIC 2007 codes are determined and submitted by the companies themselves. This change in the process of assigning industrial codes will affect the level of variability and the accuracy of the industrial coding. It is possible that companies carrying out the same trade may be assigned different, or sometimes perhaps inaccurate, SIC 2007 codes. The relationship between TCN and SIC 2007 is many to many, which makes comparisons between the two breakdowns complex. 23 Planned developments and changes a) Frequency of the publication From October 2016 we have moved to a bi-annual release schedule. A release in April each year contains provisional figures for the latest available financial year. The release in October includes updated figures for the latest year with additional detail and investor statistics derived from Self Assessment returns. Statistics on Advance Assurance requests are normally included in the April release. We are now considering whether to move to an annual release. This would make it easier for users to find the latest versions of the tables as they would all be together in one release. Depending on the timing of the release, the tables with the detailed breakdowns might be published earlier in the year than they are at present. We welcome feedback and suggestions on this. b) Standard Industry Classification As mentioned above, we believe that SIC 2007 provides a more useful industry sector breakdown than the Trade Classification Numbers (TCN) approach. In this current release we have produced SIC 2007 versions of both the EIS and SEIS tables. The SIC allocation comes mainly from the Inter-Departmental Business Register (IDBR), supplemented by Companies House data. There are still issues with obtaining SIC codes for newer companies, resulting in a higher proportion of 'unknown' SIC codes in the latest year, particularly for SEIS. We will continue to investigate ways of improving this. For data from 2017-18 onwards we expect that the TCN will no longer be available. We therefore plan to only publish the SIC 2007 breakdowns and to discontinue the TCN-based tables. We welcome any feedback on this. If you wish to contact us on any of these items, please use the contact details in the section below. User engagement HMRC is committed to providing impartial quality statistics that meet our users' needs. We encourage our users to engage with us so that we can improve our National and Official Statistics and identify gaps in the statistics that we produce. If you would like to comment on these statistics or have any enquiries please use the statistical contacts named at the end of this section and on the cover page. 24 UKSA Assessment The EIS and SEIS National Statistics have been assessed for compliance with the Code of Practice for Official Statistics by the UK Statistics Authority (UKSA). The assessment report is available on the UKSA website: https://www.statisticsauthority.gov.uk/archive/assessment/assessment/assessment- reports/ The SITR statistics have not yet been assessed by UKSA and are therefore classified as Official Statistics rather than National Statistics. UKSA is an independent body directly accountable to Parliament with the overall objective to promote and safeguard the production and publication of official statistics. It is also required to promote and safeguard the quality and comprehensiveness of official statistics and good practice in relation to official statistics. 25 Contact points Enquiries about these statistics should be directed to the responsible statisticians: Louise Bradford (EIS & SEIS), Akash Patel (SITR) and Dominica Parry KAI Direct Business Taxes HM Revenue & Customs Room 2/42 100 Parliament Street London SW1A 2BQ Telephone: 03000 541121 03000 599791 03000 589593 Email: louise.bradford@hmrc.gsi.gov.uk akash.patel@hmrc.gsi.gov.uk dominica.parry@hmrc.gsi.gov.uk For enquiries relating to the EIS, SEIS and SITR schemes, please contact the HMRC Small Company Enterprise Centre. E-mail: enterprise.centre@hmrc.gsi.gov.uk Media enquiries should be directed to the HMRC Press Office contacts listed on the front page of this release. 26 Annex A: Statistical reference tables Enterprise Investment Scheme: Table 8.1 Enterprise Investment Scheme Table 8.1: Number of companies raising funds, number of subscriptions and amounts raised from 1993-94 to 2015-161 Claims data received by September 20172 Numbers: actual; Amounts: million Year2 Companies raising funds for f irst time All companies raising funds Subscriptions 3 Companies raising funds for f irst time All companies raising funds Number Number Number Amount Amount 1993-94 75 75 480 3.9 3.9 1994-95 400 425 4,970 39.0 41.4 1995-96 440 550 5,140 45.5 52.9 1996-97 475 650 11,820 73.4 94.3 1997-98 530 725 11,410 85.1 113.4 1998-99 1,035 1,265 15,330 237.8 294.0 1999-00 1,640 2,105 29,340 462.9 614.0 2000-01 2,375 3,315 45,800 667.7 1,066.0 2001-02 1,685 2,855 25,480 418.9 760.9 2002-03 1,340 2,455 27,635 372.2 667.3 2003-04 1,150 2,175 28,125 334.1 627.2 2004-05 1,210 2,190 32,360 325.4 606.4 2005-06 1,155 2,140 31,525 305.6 647.6 2006-07 1,150 2,170 39,695 376.8 732.7 2007-08 1,130 2,205 37,135 365.9 707.3 2008-09 940 1,920 23,545 288.4 517.7 2009-10 995 1,975 25,970 363.5 622.8 2010-11 1,070 2,025 32,430 312.0 548.9 2011-12r 1,565 2,680 88,930 691.1 1,033.9 2012-13r 1,195 2,475 64,150 577.7 1,034.9 2013-14r 1,410 2,845 123,620 898.9 1,594.4 2014-15r 1,740 3,370 155,190 1,121.5 1,928.5 2015-16p 1,645 3,470 176,210 996.8 1,887.6 All Years 26,355 ** 4 1,036,290 9,364.0 16,198.1 Statistics in this table are consistent w ith HMRC's policies on dominance and disclosure. Numbers are rounded to the nearest 5 and amounts are rounded to the nearest 0.1m. Totals may not sum due to rounding. p. Provisional r. Revised ` 1. Tax year ending 5 April. Source: EIS1 forms 2. Companies have a period of several years after shares are issued to submit an EIS1 compliance statement. Therefore data for 2015- 16 is provisional and subject to change due to claims not yet received, w hereas claims received for 2016-17 are currently excluded. 3. The number of subscriptions is not equal to the number of investors as an individual can invest in more than one company. 4. The total is not given as companies may raise funds in more than one year. 27 Enterprise Investment Scheme: Table 8.2 Enterprise Investment Scheme Claims data received by September 20172 Numbers: actual; Amounts: million Industry 3 2013-2014r 2014-2015r 2015-2016p Number Amount Number Amount Number Amount Agriculture, forestry and f ishing 15 8.3 10 4.8 5 2.3 Hi Tech Companies 4 815 291.8 975 341.4 1,150 460.0 Energy & Water Supply 190 390.6 200 387.1 100 154.3 Manufacturing 310 97.3 315 100.8 285 102.8 Construction 40 16.2 30 23.5 30 23.7 Distribution, restaurants and catering 385 157.1 375 153.3 315 147.3 Transport and communication 50 22.7 55 24.7 45 18.7 Business services 710 395.4 1050 683.0 1,240 817.5 Recreational activities 230 176.5 225 153.6 185 119.0 Other services 90 38.5 125 56.3 115 42.1 Total 2,845 1,594.4 3,370 1,928.5 3,470 1,887.6 Statistics in this table are consistent w ith HMRC's policies on dominance and disclosure. Numbers are rounded to the nearest 5 and amounts are rounded to the nearest 0.1m. Totals may not sum due to rounding. p. Provisional r. Revised ` 1. Tax year ending 5 April. Table 8.2: Number of companies and amount of funds raised, by industry, from 2013-141 to 2015-16P Source: EIS1 forms 2. Companies have a period of several years after shares are issued to submit an EIS1 compliance statement. Therefore data for 2015-16 is provisional and subject to change due to claims not yet received, w hereas claims received for 2016- 17 are currently excluded. 3.Trade Classif ication Numbers (TCNs) are used to identify the type of trade carried out by the company. It should be taken into account that the most recent TCN data available have been used and some companies could have changed their trade since submitting their EIS1 forms. 4. Hi Tech Companies is not a category identif ied by the Trade Classif ication system. This category includes selected companies from other industry groups involved in activities such as research and development, chemicals and computer consultancy. 28 Enterprise Investment Scheme: Table 8.2a Enterprise Investment Scheme Table 8.2a: Number of companies and amount of funds raised, by industry (SIC), from 2013-141 to 2015-16p Claims data received by September 20172 Numbers: actual; Amounts: million Industry 3 2013-2014 2014-2015 2015-2016p Number Amount Number Amount Number Amount A. Agriculture, Forestry and Fishing; B. Mining and Quarrying 20 7.1 20 6.5 10 4.8 C. Manufacturing 305 105.9 390 133.1 360 128.3 D. Electricity, Gas, Steam and Air Conditioning 115 282.8 155 410.2 55 217.6 E. Water, Sew erage and Waste 20 20.9 15 14.4 10 11.8 F. Construction 45 28.4 45 39.5 30 21.8 G. Wholesale and Retail Trade, Repairs 345 119.8 350 107.2 365 130.0 H. Transport and Storage 20 14.2 25 15.2 25 24.9 I. Accommodation and Food 135 89.2 155 103.4 115 71.0 J. Information and Communication 715 371.7 905 447.4 975 575.3 K. Financial and Insurance 130 102.1 140 108.2 115 72.5 L. Real Estate 20 9.0 35 10.3 40 19.2 M. Professional, Scientif ic & Technical 520 278.5 560 255.6 530 235.1 N. Admin and Support Services 160 56.4 205 98.8 210 107.1 P. Education 35 9.8 40 15.4 50 13.7 Q. Health and Social Work 35 13.1 30 15.2 45 24.1 R. Arts, Entertainment and Recreation 90 25.2 100 38.3 80 28.9 S. Other services activities; T. Households; U. Overseas 105 54.7 120 68.8 110 53.8 Unknow n SIC2007 30 5.5 80 41.1 350 147.6 Total 2,845 1,594.4 3,370 1,928.5 3,470 1,887.6 Statistics in this table are consistent w ith HMRC's policies on dominance and disclosure. Numbers are rounded to the nearest 5 and amounts are rounded to the nearest 0.1m. Totals may not sum due to rounding. p. Provisional r. Revised ` 1. Tax year ending 5 April. Source: EIS1 forms, Inter-Departmental Business Register (IDBR) survey and Companies House database 2. Companies have a period of several years after shares are issued to submit an SEIS1 compliance statement. Claims received for 2016-17 and 2017-18 are currently excluded. 3. Standard Industry Classif ication 2007 (SIC 2007) codes are used to identify the type of trade carried out by the company. The resulting f igures should be treated w ith caution because the most recent SIC 2007 data have been used and some companies could have changed their trade since submitting their EIS1 forms. This table is classif ied as Official Statistics. 29 Enterprise Investment Scheme: Table 8.3 Enterprise Investment Scheme Table 8.3: Number of companies and amount of funds raised, by size of funds, from 2013-141 to 2015-16P Claims data received by September 20172 Size of funds raised per company 2013-2014r 2014-2015r 2015-2016 p (Upper limit) Number Amount Number Amount Number Amount actual m actual m actual m 10,000 155 0.9 160 0.8 150 0.8 25,000 180 3.3 230 4.4 220 4.1 50,000 305 12.2 355 14.1 330 12.9 100,000 405 31.8 495 38.2 510 39.6 150,000 275 34.8 315 40.5 330 42.2 200,000 215 38.4 245 43.9 245 44.0 250,000 160 36.4 195 44.0 210 48.3 300,000 140 38.3 160 44.9 155 42.8 350,000 110 37.2 100 32.9 160 51.8 400,000 85 32.1 100 36.9 120 45.6 450,000 65 26.9 80 35.1 90 39.1 500,000 60 28.6 80 37.9 85 41.5 750,000 185 114.2 220 134.9 245 151.4 1,000,000 115 100.4 150 133.9 160 139.6 1,250,000 85 92.1 75 81.0 80 89.0 1,500,000 45 63.7 70 93.9 65 90.1 1,750,000 30 47.3 35 56.3 45 69.8 2,000,000 25 49.4 45 85.5 25 47.3 3,000,000 65 156.4 90 219.2 90 223.3 4,000,000 55 190.5 55 197.7 55 198.8 5,000,000 100 459.5 115 552.4 100 465.8 Total 2,845 1,594.4 3,370 1,928.5 3,470 1,887.6 Statistics in this table are consistent w ith HMRC's policies on dominance and disclosure. Numbers are rounded to the nearest 5 and amounts are rounded to the nearest 0.1m. Totals may not sum due to rounding. p. Provisional r. Revised ` 1. Tax year ending 5 April. Source: EIS1 forms 2. Companies have a period of several years after shares are issued to submit an EIS1 compliance statement. Claims received for 2016-17 are currently excluded. 3. From July 2007 to April 2012, companies must have raised no more than 2 million in total from Venture Capital schemes. From April 2012 companies can raise up to 5m. 30 Enterprise Investment Scheme: Table 8.4 Enterprise Investment Scheme Table 8.4: Number of companies and amount of funds raised, by region, 2013-141 to 2015-16p Claims data received by September 20172 Numbers: actual; Amounts: million Government Office Region 3 2013-2014r 2014-2015r 2015-2016p Number Amount Number Amount Number Amount England 2,590 1,504.9 3,050 1,793.7 3,215 1,795.7 - North East 55 19.1 60 16.2 50 16.8 - North West 175 58.7 205 107.5 200 93.7 - Yorkshire & the Humber 65 19.8 75 18.4 80 28.8 - East Midlands 120 52.5 110 49.0 80 31.9 - West Midlands 125 43.0 150 59.9 150 56.2 - South West 200 95.0 220 123.7 240 119.9 - East of England 230 128.3 270 183.2 270 175.5 - London 1,105 724.5 1,385 890.0 1,575 964.5 - South East 515 364.1 575 345.7 560 308.4 Wales 65 22.7 60 23.7 60 20.5 Scotland 140 42.6 200 79.1 160 53.6 Northern Ireland 35 15.1 50 24.8 25 5.5 Channel Islands / Isle of Man 10 8.0 5 3.3 5 7.4 Unknow n 5 1.1 10 3.9 10 5.0 Total 2,845 1,594.4 3,370 1,928.5 3,470 1,887.6 Statistics in this table are consistent w ith HMRC's policies on dominance and disclosure. Numbers are rounded to the nearest 5 and amounts are rounded to the nearest 0.1m. Totals may not sum due to rounding. p. Provisional r. Revised ` Source: EIS1 forms 2. Companies have a period of several years after shares are issued to submit an EIS1 compliance statement. Claims received for 2016-17 are currently excluded. 1. Tax year ending 5 April. 3. The regional breakdow n is based on the registered address of the company, w hich may differ from the region in w hich the investment took place. For more information on GOR codes see w w w .ons.gov.uk 31 Enterprise Investment Scheme: Table 8.5 Enterprise Investment scheme Table 8.5: Income tax relief, distribution of investors and amount of investment on which relief was claimed from 2013-141 to 2015-16p Size of investment in year2 2013-2014r 2014-2015r 2015-2016p (Upper limit) Number of Amount of Number of Amount of Number of Amount of investors investment investors investment investors investment actual m actual m actual m 500 1,895 0.5 1,865 0.5 2,370 0.7 1,000 1,335 1.2 1,460 1.2 1,810 1.6 2,500 1,950 3.5 2,190 4.0 2,555 4.6 5,000 2,635 10.8 2,975 12.1 3,305 13.5 10,000 3,680 30.5 4,330 35.5 4,445 36.5 15,000 2,395 30.6 2,770 35.3 2,570 32.6 20,000 1,985 36.3 2,275 41.4 2,185 39.8 25,000 2,060 48.2 2,125 49.8 2,100 49.2 50,000 4,715 179.2 5,255 198.5 5,005 190.2 75,000 1,880 116.1 2,050 127.2 1,885 116.2 100,000 1,460 133.4 1,535 139.1 1,430 129.3 150,000 1,145 141.8 1,290 159.6 1,170 146.2 200,000 595 105.3 700 123.9 605 107.4 250,000 350 79.0 355 80.6 340 77.5 300,000 200 55.3 275 75.6 260 72.6 350,000 145 46.7 150 47.9 140 44.9 400,000 105 39.9 120 45.5 100 37.3 450,000 70 29.7 75 31.8 80 34.7 500,000 90 43.7 85 41.3 85 40.2 750,000 160 97.6 175 107.5 180 108.8 1,000,000 195 183.1 160 151.9 150 140.5 Total 29,050 1,412.4 32,210 1,510.1 32,770 1,424.2 Statistics in this table are consistent w ith HMRC's policies on dominance and disclosure. Numbers are rounded to the nearest 5 and amounts are rounded to the nearest 0.1m. Totals may not sum due to rounding. p. Provisional r. Revised ` 1. Tax year ending 5 April. Source: Self Assessment Returns 2. From 2008-09 to 2011-12 the maximum investment eligible for income tax relief under EIS w as 500,000 per year. From 2012- 13 the maximum has been changed to 1m per year. Total f igures provided in this table are not directly comparable

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In 2015-16, 2,360 companies received investment through the Seed Enterprise Investment Scheme (SEIS) and £180 million of funds were raised. This is very similar to 2014-15, when 2,365 companies raised a total of £180 million.

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