This tax year the Government understandably put an end to the so-called “capital preservation” asset-backed Enterprise Investment Scheme (EIS) offerings that were not in the spirit of the scheme. As a result, there are now fewer opportunities for clients to make EIS-qualifying investments before the end of the current tax year.
And while clients should always consider the investment first and tax reliefs second, we know that tax planning is a crucial part of their decision to invest with us. That is why we expect to invest all the money raised by our Vala EIS Portfolio before the end of the current tax year, in a single tranche.
Clients investing before the end of March will have their subscription 100% invested into EIS-qualifying shares by April 5th. This will grant them EIS income tax relief – 30% of the value of their investment – for this tax year, or allow them to carry back EIS income tax relief to the 2017/2018 tax year. Once they have invested, they must hold the shares for at least three years.
To make this tranche happen we have been working on a number of investments in parallel for the past few months. All the companies will complete our usual due diligence and investment committee process before completion.
Some of the companies we plan to back in this tranche include:
Arksen is developing a unique range of semi-autonomous explorer vessels for pleasure, research and commercial purposes capable of operating even in the world’s harshest environments.
The company launched its brand and showcased designs for its first vessels at the Dusseldorf boat show in January 2019 and generated significant press attention, including an article in Forbes. Its potential order book now stands at around £40m, subject to the company completing a prototype vessel scheduled to be finished in June 2020.
Great British Biscotti Company
Based in Dorset, GBBC was founded in 2013 and initially focused on selling biscuits at farmers’ markets in the New Forest area. Today the company’s product range includes a variety of different sweet and savoury flavours available in different types of packaging, ranging from single biscuit packs for the airline industry, through to 1kg boxes of loose biscuits for the food service industry. The company has also recently won a major contract to supply Asda and is in discussions with other large supermarket chains.
GBBC needs further funding to invest in its production facilities, allowing it to increase its output while maintaining product quality – crucial for supplying supermarkets.
Playstack helps game developers publish and market their games. Central to the service is a proprietary technology platform that uses AI to analyse millions of data points in order to promote games to the right consumers. The company achieved turnover of £1.1m in 2018 and is forecasting sales of £5m this year.
The company will use the funds raised to further develop its technology platform and extend its engagement to potential clients and partners.