VCM21040 - EIS: general: procedure: requests for advance assurance: responding to

The response to a request for an assurance will take the form of a statement as to whether, on the basis of the information provided, HMRC would be able to authorise the company to issue certificates under ICTA/S306 (2) or ITA/S204 in respect of the shares to be issued, following receipt of a form EIS1 satisfactorily completed.

In some cases there will be a clear possibility that the company will at some future time within the three year period (see VCM20600) cease to satisfy one of the conditions (for example, excluded activities which the company intends to carry on might come to be a substantial part of its trade, see VCM17040). Any assurance given in such a case will need to be expressed as being subject to the proviso that the condition in question is satisfied throughout, and may incorporate an explanation as to how it is proposed to apply the test in question (for example, how it is proposed to decide whether the excluded activities make up a substantial part of the trade).

Where a company supplies valuations or forecasts responsibility for their accuracy lies entirely with the company.

Where an assurance is given and shares are issued in reliance on it the company will need to take care that the conditions relating to the company and its trade are complied with throughout the three year period (see VCM20600) related to the shares.

Where the officer is unable to give a favourable response to a request for an assurance, a brief explanation of the reason will be given. But it is entirely the company's responsibility to decide what amendment, if any, it should make to its proposals.