Note: In order to start claiming your relief you will need to have your EIS3 form, which will have been provided to you by the company in which you’ve invested. This form confirms the amount you invested and states that the investment is eligible for tax relief. HMRC may ask to see your EIS3 form even after your taxes have been processed, so be sure to keep this form safe.
This guide assumes you complete your own tax forms. If you have an accountant, you’ll simply send them your EIS3 form and let them do the rest. If you are employed under PAYE, the process is different. Jump to the section titled 'Additional notes', which lays out what you need to do.
In order to save yourself time scurrying about trying to find forms and information when you’ve got a deadline to meet, I recommend creating a small Excel file and populating it with all of the following information, which HMRC will require if you're to claim EIS relief:
- The names of the companies you’ve invested into
- The amounts, per company, for which you’re claiming relief
- The date the shares were issued (often not the day you invested)
- The HMRC office authorising the issue of the EIS3 certificate, and their reference (as shown on the certificate)
Collating the above in an Excel file will enable you to sum up the total amounts invested, which is an additional figure you will need to enter into your tax return (see Step 2 of 'Filling in the form').
In addition, if you have subscribed to more than £1m worth of shares – remember that you can only claim relief on £1m of investment through EIS per year – you will need to define how you want the relief attributed to these shares.
Filling in the form
If you’ve done your preparation, have all of the information outlined above and have access to your EIS3 forms, claiming relief on your taxes is a fairly straightforward process.
- Go to the section of your tax return titled 'Additional information'
- In box Number 2 on Page 2, you will need to enter the total amount you invested into EIS companies for which you will make a tax relief claim.
- Go to Page 4 and in the large box, where it asks 'Please give any other information in this space', you will need to enter the information stated in the bullet points in the preparation section of this article.
- You do not need to complete Pages 3 and 4 of the EIS certificate and you do not need to send the EIS certificate to HMRC along with your return. However, as mentioned above, HMRC may request to see it to support your claim so do keep it in a safe place.
If you are employed under PAYE or for any other reason do not normally complete a tax return, the process for claiming EIS relief is slightly different. You will need to fill in Pages 3 and 4 of the EIS Certificate and send them by mail to the HMRC officer that deals with your tax deductions.
If you’ve invested into an EIS fund and the fund was approved by the HMRC, you only need to make one claim on your tax return for the entire amount invested into the fund. If the fund was not approved, you will have to make individual claims for your allocated investment into every company that the fund invested in.
If you have issues with these forms or claiming relief, you can reach HMRC on 0300 2003300. Learn more about the reliefs you may receive from the enterprise investment scheme.