As with many official HMRC processes, applying for EIS tax relief can be a confusing endeavour. Much will depend on how many EIS-eligible investments you are claiming tax relief for.
Generally speaking, you will need to enter each individual investment separately, although some funds hold HMRC-Approval, which means that your investment in the fund is treated as a single investment regardless of how many investments that fund goes on to make. This has been the case for several iterations of our very own Fund Twenty8 – a fund that invests in no fewer than 28 opportunities. You can read more about EIS funds here.
To try to explain the process of claiming EIS tax relief through self-assessment in as straightforward a way as possible, we've broken the process down into the steps below.
- Head to www.tax.service.gov.uk and sign in. If this is your first time completing a self-assessment form, you will need to create an account. When prompted with the question 'Do you want to claim other tax reliefs and deductions…', check 'Yes'.
- Proceed through your return as normal.
- On Page 3, confirm that you would like to claim tax relief.
- You will need to add details of your investment into the 'other tax relief and deductions' section.
- Your investor dashboard will provide details of all the investments you make through SyndicateRoom, including those made by the fund.
- Return to www.tax.service.gov.uk/self-assessment and click 'Amend other tax relief and deductions'.
- Fill in the details using the information on your dashboard.
- Your will be shown the calculation of the tax relief for which you are eligible. Check that this is correct and click 'Next' to proceed.
- Click 'Request Payment'
- Request a repayment – insert the amount you wish to request for repayment
- Select 'My personal account'
- Include your personal details
Once you confirm your details are all correct, you're good to go! As always, if you have any questions, you should consult your financial adviser.
Looking for a hassle-free way to build a diversified portfolio of EIS-eligible startups? Fund Twenty8 invests in no fewer than 28 EIS opportunities spanning numerous sectors, with the aim of mitigating risk through diversification.
Fund Twenty8 normally operates as an HMRC-Approved fund, meaning investors are issued a single EIS5 certificate for 28 (or more) fund investments, making the process of claiming tax relief that much more simple.