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HMRC internal manual

Venture Capital Schemes Manual

EIS: income tax relief: company and investor procedures: company procedures: company’s statement on EIS1

ITA07/S204 (2), S205

A company whose new shareholders ask it for certificates enabling them to claim relief (whether income tax relief or CGT deferral relief) cannot issue them without first obtaining authority from HMRC. To do this the company must provide HMRC with a statement to the effect that the conditions for the relief (apart from any which relate to the investor) have been satisfied so far, and that it intends to ensure that they continue to be satisfied. It is therefore not possible for a company to obtain authority to issue certificates once it has ceased to satisfy any condition. So for instance, coming under the control of another company would make the issue of certificates impossible even where, had relief already been obtained, it would have been preserved by the operation of ITA07/S247 or TCGA92/SCH5B/PARA8 (see VCM16030).

Where there is more than one issue of shares, the company must submit a separate statement in respect of each issue. (All shares of the same class issued on the same day count as one issue). Statements must be made on the appropriate print of form EIS1 (see VCM14080).

A company cannot submit a statement until the trade (or research and development) for which the money was raised has been carried on for four months (see VCM12060). (See VCM13060 for the meaning of ‘qualifying trade’.)

However, there is no need for a company to delay submitting its statement until the money raised by the share issue has been employed (see VCM12050).

A company cannot submit a statement after the later of the following dates:

  • two years after the end of the year of assessment in which the shares were issued,
  • two years after the end of the period of four months referred to above.