EIS Claim Form

FredyBs

Hello,

I would like to ask for some advice regarding the completion of an Enterprise Investment Scheme (EIS) tax relief claim. I have made two investments via the Crowdcube and I have received my EIS certificates. I pay my tax via PAYE as I'm in full time employment and I don't fill any tax returns. I understand that I can get the tax relief from my investment via adjustment to my tax code after I summit the two forms (pages 3&4). Both investments were in FY18/19 (1st - shares issued May 2018, 2nd March 2019).Can I claim the tax relief for both in the current FY19/20 or do I have to back-date them?

This is were I'm getting confused as the form has two options:
"for the year ending 5 April ..... been the year in which the shares were issued"
or
"for the year ending 5 April ..... been the previous year"

Do I fill the second option with 2019, as I would claim for last FY?
I will appreciate your advice. Thanks.

bowlhead99

If the shares were issued in the tax year ending April 2019 and you want to claim the income tax relief for that tax year you would fill it out to say "year ended 5 April 2019 being the year in which the shares were issued". That's the first option.

If you would instead prefer to claim for the previous year you would use the second option which wasn't the year in which the shares were issued, and say "year ended 5 April [2018] being the previous year"

Dazed_and_confused

I understand that I can get the tax relief from my investment via adjustment to my tax code

Both investments were in FY18/19

Unless you have a TARDIS you cannot get tax relief for this through your tax code.

You will to accept HMRC doing a full calculation and refunding any tax overpaid as a lump sum.

FredyBs

bowlhead99 wrote: »

If the shares were issued in the tax year ending April 2019 and you want to claim the income tax relief for that tax year you would fill it out to say "year ended 5 April 2019 being the year in which the shares were issued". That's the first option.

If you would instead prefer to claim for the previous year you would use the second option which wasn't the year in which the shares were issued, and say "year ended 5 April [2018] being the previous year"

Thank you for the prompt response, so if I select the first option and say 2019 (which was year when the shares were issued) when would the tax relief been effective? Would HMRC issue a refund on my paid tax for last FY or they will adjust my tax code for next FY?

Dazed_and_confused

You cannot get a refund through your tax code for an EIS investment made in an earlier tax year.

FredyBs

Dazed_and_confused wrote: »

Unless you have a TARDIS you cannot get tax relief for this through your tax code.

You will to accept HMRC doing a full calculation and refunding any tax overpaid as a lump sum.

Is this because I didn't claim on time in last FY?
There is a box to tick on the form saying " I wish relief to be allowed in my PAYE coding" do I tick that or leave it?

The second option on the form says " I am claiming relief for a year for which I have already sent in a tax return" - I guess this is not applicable for me as I don't fill any tax returns.

Appologies, if my questions are so lame but I'm really new to this.

Dazed_and_confused

Unless it is a large amount there is usually no need for a Self Assessment return just because of a claim for EIS income tax relief. If you already need to file a return then you would include the EIS details on the return.

But you cannot have the tax relief for one year (2017:18 or 2018:19) included in your tax code for a different year (currently 2019:20).

So that leaves a PAYE calculation where HMRC review your tax position for the year and send you a refund of any tax overpaid. For example say you owe £2* in unpaid tax for the year and claim £200 EIS relief then you will get a refund of £198.
*most people on PAYE owe a little bit of tax each year which HMRC tends to ignore unless you need a calculation for some other reason.

FredyBs

Thank you all, I think I’m clear what I need to fill in now. Much appreciated

bowlhead99

Essentially you can see from the notes on pg4 that HMRC group people into two sets:

- if your shares were issued in the current tax year and you pay tax under PAYE, you can get your code adjusted. That's not you because they weren't issued in this current tax year 19/20 and you can't use the tax relief to reduce your 19/20 tax bill or PAYE code; only 18/19 or 17/18's tax bill.

- if you want to claim relief for a previous tax year in which you either did not receive a tax return or you received a return and have already done it, they can treat it as an amendment to your tax calculation as long as it's not several years ago and way too late for that year to be adjusted.

They describe it as an amendment to your tax return rather than tax calculation but basically meaning that; you're still in this group of people who "either did not receive a tax return or you received a return and have already done it", if you didn't do a return because you didn't receive one, back in the day.

As a consequence they will work out how much tax you've overpaid, and give you a refund.

As you don't do tax returns you can freely check the box on page 3 which intuitively sounds correct, "... I wish relief to be allowed in my tax coding", but as you missed the boat for your tax coding for 2018/19 they won't be able to grant your wish and will just recalculate the tax owed Vs what they collected through PAYE, and pay you off for the difference.

* Ah, I see you're all clear, I got stuck on a train without signal while writing the reply! Good luck with the investment!