UK's Prime Wealth Group Targets £5 Million For New EIS/SEIS Platform

Stephen Little

2 June 2014

Advisory broker Prime Wealth Group, owned by UK-based investment manager Omada Capital, has launched a new platform for Enterprise Investment Schemes and Seed Enterprise Investment Schemes.

Prime said in a statement that it is targetting investment of £5 million ($8.3 million) over the next 12 months, with the aim of providing the firm’s clients with a number of investment opportunities that provide tax relief.

The Enterprise Investment Scheme is a series of UK tax reliefs launched in 1994 in order to succeed to the Business Expansion Scheme and was designed to encourage investments in small unquoted companies carrying on a qualifying trade in the UK. The Seed Enterprise Investment Scheme was unveiled by the UK government in April 2012 to encourage investors to finance startups by providing tax breaks for backing projects they may otherwise view as too risky.

Prime said it is is currently using the EIS/SEIS platform to secure £150,000 for Metall-FX, an early-stage company as well as scheduling a series of deals from the film production sector.

Patrick Butler, Prime’s CEO, said that this structure was different from other tax-driven film finance deals which have not been accepted by HMRC as SEIS and EIS are approved by the the UK's revenue authorities, and assuming the rules are followed, the tax relief is automatic.

Recent research by entrepreneurs group E2Exchange, showed that there is a lack of awareness among UK entrepreneurs of EIS/SEIS scheme. According to the survey, over 25 per cent of entrepreneurs had not heard of EIS, while 35 per cent were not aware of its benefits.

Under EIS, companies are able to accept up to £5 million of investment, while individual investors are able to buy shares up to £1 million and receive up to 30 per cent in tax relief on the cost of the investment.

SEIS aims to specifically help young, start-up companies raise equity finance and so far SEIS has helped over 1000 companies, raising over £80 million from private investors. Tax relief of 50 per cent on the initial cost of the shares is available on an investment of up to £100,000 in a single tax year.