Claiming EIS tax relief

***UPDATE***   EIS3 certificates dispatched to investors on 10th July 2015

At the beginning of June 2015 Osney Lock Hydro submitted a compliance statement to HMRC, with details of each of the shareholders, their shareholding and the type and date of shares issued. Once HMRC is satisfied, they will grant OLH the authority to issue the certificates (EIS3) that shareholders need in order to claim their tax relief (30% of your investment). The compliance statement can only be submitted to HMRC when a company has been trading for at least four months.  HMRC will send OLH a set of blank certificates, which we will then need to populate and sign before sending them on to shareholders.

We are producing some guidance on how to claim your tax relief, and it will be sent out with the EIS3 certificates. Guidance is also available from HMRC: click here to go to the HMRC guidance.

A brief outline of the principles behind claiming EIS tax relief on your OLH shares follows.

Shareholders whose investment dates back to the original share issue in 2013 will need to complete the claim part of the EIS3 certificate and send it to their tax office. This is because EIS tax relief can be claimed against either tax paid for the tax year in which the shares were issued (2013/14), or the previous tax year, 2012/13, or a combination of both. Shareholders will have already paid tax for those two years.

However shareholders who invested further (or for the first time) in the second offering in 2014 will need to claim at least part of their relief on the basis of whether or not they pay tax by PAYE or via a self-assessed tax return, ie whether they have already paid tax for the year 2014/15. They can also claim part or all of the relief against the previous tax year, ie 2013/14.

If you have not yet submitted your tax return for 2014/15 and you wish to claim the relief against that tax year, you will need to make the claim on your tax return.

The detailed guidance that we will be sending should help shareholders work out what they need to do. If you have any doubts, we recommend checking with your accountant or financial advisor.

 

June 2015