VCM14080 | Venture Capital Schemes Manual: the Enterprise Investment Scheme: income tax relief: EIS company procedures: compliance statement: examination of post-investment compliance checks

HMRC VCR Team may ask some companies for further information to check that the company has met the conditions that apply in the three years following the issue of the shares. These conditions include the requirement to employ the money within two years after the shares are issued (see VCM12050) and to ensure the money is used for the purposes described in the compliance statement.

Companies that are required to meet the operating costs conditions, or meet the skilled employees condition, for the three years following the investment, to maintain their status as knowledge-intensive companies will also need to provide HMRC with a statement and supporting information to demonstrate their compliance after the end of three years (or earlier, where the operating costs condition is met before the end of three years).

HMRC will also make enquiries at any time where information indicates that conditions have not been met, for example where it appears value has been received by an investor or non-recourse loans have been made available to investors.

If any enquiry needs to be made, it will normally be made informally in the first instance. However, HMRC may use its statutory powers to obtain information (see VCM15170), subject to agreement with the CT Innovation & Growth Team (CT I&G team).