An independent ratings agency for equity crowdfunding has launched an enterprise investment scheme calculator to show how investment could impact their tax position.
CrowdRating has developed the free online tool to help the growing number of retail and certified crowdfunding investors find out the full tax impact of their investments.
They can use the SEIS and EIS calculator to work out how crowdfunding could reduce the amount of income tax and capital gains tax paid in this tax year and how much could be reclaimed against last year’s tax bill.
Investors will also be able to use the calculator to find out how different investment scenarios, such as a change in the amount invested or expected future investment returns or losses, might affect their tax position.
In 2013 to 2014, the latest period for which data is available from HM Revenue & Customs, more than 26,000 investors invested more than £1.5bn in EIS qualifying companies.
Meanwhile, more than 7,000 investors claimed income tax relief from SEIS investments during the same period.
CrowdRating estimated there may have been more than 100,000 more investments under the schemes, made by more than 60,000 private individuals “in the crowd” during 2015.
Modwenna Rees-Mogg, co-founder of CrowdRating, said: “Now that investors can use our SEIS and EIS calculator to work out what tax they can reclaim, they need to ensure they receive their SEIS and EIS certificates and submit them to HMRC in time to make their claims.”
Dan Farrow, director of Essex-based SBN Wealth Management, said: “It is only a small proportion of people who would be attracted to this type of investment because they tend to be high risk, small companies so you have got to be a certain type of investor to want to use them.
“I don’t think a tool will encourage people to invest in them.”