The Enterprise Investment Scheme (EIS) is a UK government initiative established in 1994 to encourage investments in small, high-risk companies by offering tax reliefs to individual investors. The scheme aims to help these companies raise capital to grow their businesses.
Under EIS, investors can receive 30% income tax relief on investments up to £1 million per tax year, exemption from capital gains tax on profits if the shares are held for at least three years, and loss relief if the investment doesn’t perform as expected. Additionally, EIS investments can offer inheritance tax relief if held for over two years. These incentives are designed to mitigate the risks associated with investing in early-stage companies.
One company leveraging the benefits of EIS is Neonify Ltd, an innovative content generation platform based in Brighton. Neonify.ai utilises machine learning and neural networks to produce highly relevant content that matches the tone of voice of brands and publisher sites.
The platform can generate thousands of unique, accurate pages of content in real-time, enhancing traffic and monetisation without replacing human content writers. With the launch of Neonify v.3.0, the company has introduced enhanced capabilities, aiming to exceed market demands and customer expectations by providing seamless, high-quality content output.
Investing in Neonify through the EIS offers several benefits:
- Strong Valuation Growth: Currently valued at £8.2 million, Neonify projects a valuation of £80 million within four years, presenting significant growth potential for investors.
- Tax Advantages via EIS: Investors can benefit from 30% income tax relief, 100% capital gains tax exemption on profits from shares held for at least three years, up to 45% loss relief, and inheritance tax exemption.
- Multiple Exit Strategies: Neonify provides several potential exit routes for investors, increasing the likelihood of realising returns on investment.
Fraser, Director at Level Investment, emphasises the opportunity: “Investing in Neonify not only offers substantial growth potential but also allows investors to take advantage of significant tax reliefs under the EIS.”
By participating in the EIS through companies like Neonify, investors can support innovative UK businesses while benefiting from attractive tax incentives and potentially high returns.
