The Enterprise Investment Scheme Association (EISA) has reported notable regional growth in the use of the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) despite an overall decline in the latest HMRC data for the tax year 2022/23.
The record-breaking results of the previous tax year 2021/22 were challenging to surpass, but key regions have shown significant positive trends.
The 2022/23 data reveals a return to pre-pandemic levels, with significant growth in the number of businesses using the EIS in the North East and Northern Ireland. The East of England, buoyed by the Cambridge science and technology hubs, and Northern Ireland have shown increases in EIS investment compared to the previous year. Northern Ireland, in particular, stands out with an 11% growth in the number of businesses using the EIS and a 57% increase in the amount of EIS investment raised.
Growth in the North West
The North West continues to show robust growth in early-stage businesses, with the number of start-ups benefiting from SEIS increasing by 20%, and SEIS investment growing by 38%. This growth is significant compared to the overall regional decline of 24%, aligning with the Gender Index Data that cites the North West as having the largest number of businesses in England outside of London and the South East.
Since their establishment in 1994, the EIS and SEIS have been instrumental in driving innovation and economic growth, channeling £32 billion of investment into over 56,000 start-ups nationwide. These schemes have catalysed entrepreneurial success and provided significant investment opportunities across various sectors, including life sciences, AI, and clean technologies.
EISA’s Commitment to Regional Development
EISA remains committed to increasing the number of businesses benefiting from the EIS and SEIS across the UK. The Ready Steady Grow! outreach campaign aims to inform and engage entrepreneurs, investors, and advisers about the opportunities provided by these schemes. This series of events ensures that SMEs have the necessary information to secure vital investments, enabling them to grow and scale their businesses effectively.
EISA Director General Christiana Stewart-Lockhart noted that the percentage of companies using the EIS in London and the South East remained unchanged at 65%, despite significant growth in recent years. Conversely, the percentage of companies in these regions using SEIS dropped slightly from 67% to 65% in 2022/23. This shift indicates important growth momentum in the UK’s regions and devolved nations.
Stewart-Lockhart highlighted the diverse applications of EIS and SEIS, which have supported thousands of fast-growing start-ups across the UK. These include companies developing new cancer diagnostic methods, AI technologies to improve workplace efficiency, plastic-free food packaging, and clean technologies aimed at reducing carbon emissions.
The latest HMRC data for 2022/23, while showing a decline from the previous year’s record figures, underscores the resilience and growth potential of key UK regions. With continued support from EISA and initiatives like Ready Steady Grow!, the EIS and SEIS schemes are set to further drive innovation and economic growth across the nation.
