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Budget 2014 - how it affects EIS investments

How will changes introduced in this year’s Budget affect investments like the Oxford Capital Infrastructure EIS?

IMPORTANT UPDATE TO THIS BLOG POST: The Finance Bill 2014 came into force on 17th July 2014. The Oxford Capital Infrastructure EIS no longer invests in companies which own or operate solar panels. Investments are now focused on other forms of renewable energy and infrastructure. You can read more here.


It was changes to pensions and savings rules that grabbed most of the financial headlines when George Osborne delivered his Budget on 19th March. But in the small print were some revisions to the Enterprise Investment Scheme (‘EIS’), which will take effect when the Finance Bill obtains Royal Assent later this year.

Renewable energy companies which have received funding through the EIS will be not be able to benefit from the Renewable Obligation Certificates (‘ROCs’) or Renewable Heat Incentive (‘RHI’) schemes. Since it is not unusual for half of the revenues from assets such as solar installations, anaerobic digestion plants and biomass boilers to come from these subsidies, companies raising money for new projects will clearly need to look beyond the EIS to secure their funding.

Why has the Government taken this step? As the costs of renewable energy production have continued to fall, allowing investors to benefit from 30% EIS income tax relief has started to look increasingly generous. The Government has consistently tried to subsidise renewable energy to allow investment yields of 5% – 7% per annum. EIS benefits can take returns far beyond that level. For example, for investors in our Oxford Capital Infrastructure EIS we aim to achieve an overall return equivalent to 10%-12% per annum. As such, we are certainly not surprised to see the Government call time on this sort of investment.


For now, it is business as usual.

The Treasury has assured us that the EIS rule changes will not be retroactive – all EIS investments made prior to Royal Assent of the Finance Bill will be unaffected by the new rules. We will be making investments through our Infrastructure EIS in both May and June. These investments will qualify for EIS reliefs as well as for ROCs, and so our target returns remain unchanged.


To date the Oxford Capital Infrastructure EIS has been largely focused on investment in renewable energy including Solar PV installations and Anaerobic Digestion plants. But our long-term Infrastructure strategy is to invest in a broad a range of assets, and we continuously assess a pipeline of opportunities in the sector. Over the coming months, we will be developing our strategy to focus on investments that will still qualify for EIS reliefs after the Finance Bill comes into force.

As part of this process, we will be paying close attention to a Government consultation that was also announced in the Budget. The Treasury has expressed a general concern about the use of EIS in combination with investments which it views as low-risk. The consultation will examine this perceived problem, and most likely issue detailed guidance notes to help HMRC assess EIS qualification.

We will also be continuing to make Infrastructure investments outside the EIS regime. For example, our Estate Planning Service (‘EPS’) allows investors to shield part of their estate from Inheritance Tax, by investing in infrastructure companies which qualify for Business Property Relief. The EPS targets annual growth of between 3% and 5% and, unlike EIS investments, allows investors to request access to their capital if their financial plans change.

Finally, it is worth noting that the rule changes will have no impact on our growth capital strategy. The Oxford Gateway EIS Portfolio, investing in companies with high growth potential, remains open for investment.

If you would like to discuss the rule changes with us in more detail, or find out more about any of our investment opportunities, please contact us on 01865 860760.


  • An investment should only be made on the basis of the formal Information Memorandum of each fund.
  • Your capital is at risk and you should not invest if you are not willing to bear this risk.
  • Tax advantages are summarised based on current legislation, which may be subject to change in the future.