Applecross hydro will be one of the last community run renewable energy schemes which can offer investors tax relief on their shares investments. Apple Juice (Applecross) Ltd applied to HMRC to be registered for the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS). Both were designed by the government to encourage investors to put money in to small companies which were setting up and needing capital investment to get underway.
Apple Juice was accepted to both schemes on 19th October. This means that UK tax payers investing the first £150,000 into the scheme are entitled to 50% tax relief on their investment through SEIS, while those investing after that are entitled to 30% tax relief through EIS.
At the time we applied for registration, we knew that both SEIS and EIS were to end soon, but that EIS was to be replaced by a similar scheme to be called SITR (social investment tax relief) which the government had indicated renewable energy would also be eligible for.
On 26th October it was announced that SEIS and EIS are ending on 30th November and that renewable energy is not going to be a qualifying trade which is eligible for SITR. To be eligible for tax relief through EIS, all investors must be entered on to our shares register by 30th November, and we must have issued shares certificates to them.
This is yet another attack by the UK government on community energy. While Apple Juice has only just got in on time (our shares offer is to close on 30th November) there are many other community groups with schemes being developed who were planning to raise finance through shares issues. They will now struggle to raise much without being able to offer investors tax relief.