The Financial Services Compensation Scheme has begun accepting claims against a company which specialised in promoting and arranging investments in Enterprise Investment Schemes.
Ober Private Clients Ltd also sold shares in its own company but ceased trading in November last year.
In an update last week (August 25) the life-boat body said it was in the process of assessing whether any investors have a valid claim against the firm.
Investors in EIS qualifying companies can receive a tax break of as much as 50 per cent of the amount invested, with any income and capital gains exempt from tax.
Under the schemes companies can raise up to £5m each year and up to a maximum of £12m in its lifetime.
Changes introduced in the 2017 budget saw then chancellor Philip Hammond tighten the rules around the types of companies that can be invested in through the schemes.
HMRC was concerned that too many EIS investments were made with capital preservation in mind, when the aim of the EIS tax breaks was to incentivise investment into risk assets.
The changes led to a drop in the number of investors using the scheme and last year HMRC reduced the number of approvals for small businesses through the EIS.
rachel.mortimer@ft.com
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