VCM21060 - Enterprise investment scheme (EIS): General: Procedure - examining form EIS1

A company cannot be authorised to issue certificates to its investors unless it has submitted a statement on form EIS1 which complies with the rules mentioned at VCM21050 and the HMRC officer is satisfied that:

• all the information given on form EIS1 is correct, and
• there is no reason not to accept the declaration given on the form.

If so satisfied, the officer must give the authorisation even if it appears that none of the subscribers listed will be able to obtain relief (see Wild v Cannavan, 70TC554). It is therefore not necessary for the officer to consider the identity of the subscribers at this stage.

In examining the statement the officer will consider whether any of the information supplied at any “advance assurance” stage has proved inaccurate, and will explore any matters about which unsupported statements were originally accepted. Where only draft documents were previously seen (for example, a draft prospectus) the final document will be obtained and examined. If the company did not seek an assurance in advance, all the items listed in VCM21020 above will now need to be supplied.

As with the giving of advance assurances, HMRC is normally bound by a decision to authorise relief, so the company's statement will be considered very carefully and any necessary clarification obtained before a decision is made.

Under ICTA/S306(6) or ITA/S207 the furnishing of a false statement attracts a penalty. The maximum penalty is £3,000.