Well that was a non event!

The March 3rd Budget passed without a single mention of EIS or SEIS and was primarily concerned with continuing the recovery and support of businesses from the Covid pandemic.

There was however some insight into how the Government may transition from fostering recovery to fostering growth within the “Build, Back, Better” document that accompanied the Budget. This document did mention EIS and SEIS, albeit in passing, but this was certainly an acknowledgement that the schemes have a part to play in future plans and are not being ignored.

For a number of reasons, we shouldn’t be either surprised or worried the schemes didn’t warrant more of a mention.

Firstly, as we all very aware EIS and SEIS are fully focused on growing and developing businesses so at a time when the Government is more concerned with saving and propping up businesses it’s easy to understand why the schemes aren’t being talked about.

Secondly, Budget day has been somewhat extended this year by the announcement of a “Tax Day” on 23rd March when HM Treasury will release further documents and consultations in relation to specific tax changes and amendments that are being considered. Again, we don’t expect anything directly related to EIS and SEIS to be announced here but we may get an indication of direction of travel.

Thirdly, although EIS and SEIS no longer come under auspices of EU State Aid (I can hear our Chairman’s cheers from here!) the schemes are in somewhat of a no man’s land. Whilst the Trade and Cooperation Agreement (TCA) agreed with the EU has a subsidy regime, the EIS and SEIS schemes aren’t classified as subsidies so aren’t part of TCA. The UK has announced it will introduce it’s own subsidy regime and are currently consulting as to the best way of doing this. Add to all this that whilst the UK has repealed all EU State aid regulations from the UK domestic law from 1 January 2021, it is necessary to retain them for the purposes of the Protocol on Ireland/Northern Ireland.  This keeps Northern Ireland under most EU State Aid restrictions and means any relaxations to EIS and SEIS are unlikely, at least in the short term.

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