HMRC released the annual statistics relating to EIS and SEIS on 27th May 2021 and encouragingly they show the schemes to be in rude health with yet another year on year increase in the headline figures.

The statistics relate to the 2020/2019 tax year so we won’t know the full impact of Covid on EIS and SEIS until the next set of figures are released (which is likely to be in May 2022) but funding from EIS increased to £1.905Bn in 2020/2019 up from £1.867Bn in 2019/2018 with an additional 155 companies receiving funding from the scheme (4,215 in 2020/2019 from 4,060 in 2019/2018). For SEIS, the numbers remained largely flat at £170M in 2020/2019 compared to £171M in 2019/2018.

Unsurprisingly, the majority of investment (33%) was received by companies in the Information and Communication sector (HMRC continue to use SIC codes to identify sectors) and just 4 sectors (the Manufacturing, the Wholesale and Retail Trade, Repairs, the Information and Communication, the Professional, Scientific and Technical sectors) together account for around £1,352 million of investment and made up 71% of all EIS Investment. Once again, it would be useful if HMRC drilled down further into those sectors to give us a better understanding of what real life sectors are receiving EIS and SEIS investment as the above SIC codes are rather meaningless.

As mentioned, we wont get the important 2021/2020 stats until next year but a useful leading indicator is the number of Advance Assurance applications HMRC received in 2021/2020 which they do publish. This shows applications are down from 3,440 in 2020/2019 to 3,080 in 2021/2020. SEIS however shows an increase in applications from 2,755 in 2020/2019 to 2,900 in 2021/2020 perhaps reflecting Covid has hit earlier stage companies much harder than those at a later stage as also identified in our recent report

Another key finding from our survey was that EIS funding continues to be unevenly distributed across the regions of the UK. This is also borne out by the HMRC stats showing that the proportion of the amount of investment in companies registered in London and the South East was 66% in 2019 to 2020.

All in all, the numbers don’t provide us with any great surprises except for providing important reaffirmation that the schemes deliver funding to exactly the sectors and stage of company that they are designed to. With the 2025 sunset clause coming ever closer into view, this is another timely reminder that the schemes have a 27 year track record of delivering equity funding from the private sector to those exciting startups and early stage businesses who the UK economy will be relying on in a post Covid environment. Unless the sunset clause is removed (this was an EU State aid requirement), EIS and SEIS face being slowly wound down.

Where can I read statistics from more recent years?

We have insights on each year of HMRC data since 2020. You can also explore a snapshot of the market and other key data.

Check that all out here.

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