Support and Frequently Asked Questions

When was the Enterprise Investment Scheme launched?

The EIS was introduced by the UK Government in 1994 to help small UK companies raise capital from private investment.

What are the risks of EIS?

EIS investment carries its own risks. A company must meet a ‘risk to capital’ condition which states that the investment must be a risk to the investor’s capital. Specifically, the investment should carry a risk that the investor will lose more capital than they are likely to gain as a net return. This net return includes income from dividends, interest payments and other fees, capital growth, and upfront tax relief.

It is inherently riskier to invest in small companies over large ones. Because they have a greater propensity to run into difficulty and fail, investments can be hard to sell. The government understands this, which is why EIS gives investors tax relief as an added benefit and incentive to invest.

Read more about the benefits and risks of EIS here.

Can I withdraw my money from an EIS portfolio at any time?

As the minimum investment term is three years from investment, you are unable to withdraw your money before this time. It’s important that the minimum holding period for any EIS investment is confirmed in advance of any investment decision being made as these can vary and your funds could be tied up for many years. It is also worth noting that the three year minimum holding period only starts from the point that the portfolios subscribes to new shares in each investee company.


You can only exit from an EIS when the investee companies are sold, liquidated or listed. The EIS manager will work with the investee companies to pursue an exit strategy that is beneficial to both the company and its investors.

What tax benefits do EIS portfolios offer?

The Enterprise Investment Scheme (EIS) has been designed by the Government to encourage private investment into small high risk trading companies by offering a range of tax incentives.
Providing the underlying investments made by the EIS are held for at least three years (for Income Tax relief and tax free growth), the current tax reliefs available are:

•30% upfront income tax relief up to maximum investment of £1 million, which can be carried back to the previous tax year
•100% inheritance tax relief (provided the investments are held at time of death)
•Capital Gains tax deferral for the life of the investment
•Tax-free growth
•Tax relief from investment losses

How do I claim tax relief from EIS investments?

Films 4U will supply you with an EIS3 certificate. These certificates should then be used to complete your tax returns and display the maximum amount of capital gains or income tax relief that can be claimed. This is important, as you need this to claim EIS tax relief.

The amount that you have invested is confirmed on the form and there should be a statement that the investment is eligible for tax relief. Keep this form safe in case HMRC requires it – they may ask to see you’re EIS3 even after your taxes have been processed.
For the tax year in which the shares were issued, your claim can be made through the self-assessment tax return.

Is EIS a form of tax avoidance?

EIS is a Government backed scheme that offers tax relief to compensate investors for the risk associated with an investment in a small unquoted company. These companies find it hard to raise the finance necessary to grow their businesses from other sources and the government seeks to encourage their expansion to help boost the economy. The Government has been vocal in its support of EIS as the acceptable face of tax planning.

What criteria do companies need to meet to qualify for EIS funding?

There’s a comprehensive set of criteria your company must meet to qualify for EIS. Your company may be EIS eligible if at the time of investment, it has:

• no more than £15 million in gross assets.
• less than 250 employees.
• been more than seven years since its first financial sale.
Money raised by a new share must:
• Be spent within two years of the investment (or the date you started trading if later).
• Not be used to buy all or part of another business.
• Be used to develop or grow your business.
• Pose a risk of loss of capital for the investor.

 What will happen if the film never gets seen?

Investors are paid back from the funds we receive after the film is sold rather than how it performs.

What happens if the film doesn’t sell?

The films are funded one at a time to ensure there isn’t a portfolio of half completed projects. We want to maximise your chances of getting higher returns to a point where we can almost guarantee it so if there is a shortfall in the funds raised, the company covers the difference. We do make sure the current projects are detailed on the website also so you can always look on there to keep updated.

Are you FCA regulated?

With the EIS, the scheme itself is approved by both HMRC and the FCA therefore there’s no specific requirement for the company to be covered by them. If we were giving advice, then we would need to consider this however because this is a non-advised service we don’t need to.

Are you covered by FSCS?

While EIS investments are not covered by the FSCS, there is some protection from loss in the form of EIS loss relief. If EIS shares are disposed of at any time for a loss, this can be set against the investor’s capital gains or income tax liability.

When do you receive the tax relief from the government?

This would come in the form of an EIS certificate from HMRC, called an EIS3 Form – which is then used to claim back against last year’s tax bill, or offset against this year’s bill.

SPV Explained

You will be investing  £x into the Films4U Enterprise investment scheme (EIS), The funds will be going into a newly formed SPV (Films4U EIS 1) which is a requirement for EIS investment, as they are designed to support new businesses and start-ups.

Films4U have set up a number of these new SPVs since 2013, and every investor has made money and every investor has received their tax relief. The Group of companies also includes High Fliers Films, who guarantee distribution of the production you are investing in, which has been established 30 years, and the same family own HF as F4U.