Enterprise Tax Centre has recently helped a fast growing festival company secure investment to fuel its expansion plans by locking in the benefits of the Enterprise Investment Scheme (“EIS”).
ETC worked with the Geronimo Festival to ensure investors into the business qualified for both Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme.
It meant that the individual investors could claim tax relief on their investments including income tax relief of 50% on their SEIS and 30% on EIS. In due course, they will also qualify for a Capital Gains Tax (CGT) exemption on the sale of shares.
This year’s Geronimo Festival was held at two venues, Tatton Park in Cheshire and Harewood House in Yorkshire, attracting over 40,000 visitors.
It has quickly established itself as the largest family festival in the UK including TV superstar live shows, circus, theatre companies, bands, motorcycle displays, funfair rides, high rope courses and den building.
Next year, the biggest ever Geronimo Festival will take place at one site, Tatton Park, while plans are also being drawn up to stage a teenage music festival.
Simon Goldman, who is based in Manchester, came up with the idea of the Geronimo Festival after becoming frustrated at the lack of quality events aimed at the family. Simon, who used to work in import and export, has seven children ranging in age from 2 to 17.
Simon said: “I had a passion to put on a big event for all the family. There was so little to do with the kids on a Bank Holiday, particularly in the North of England.
“I thought we could create something really good if we merged together lots of different entertainment aimed at parents and their children. I also insisted that there was one price with everything included.
“Putting on a festival of this scale is an expensive business and I am a great believer that soft launches don’t work – you just have to go for it! We have a small in-house team and outsource everything else to specialists in making events like Geronimo happen.
“We had a number of individuals who wanted to invest in the company and I was introduced to Andy Wood of Enterprise Tax Centre by another professional adviser I have worked with.
“Andy put in place the structure for our investors to invest in the most tax efficient way including taking advantage of SEIS and EIS. Andy worked closely with our solicitors giving very clear advice and guidance and helping to obtain the necessary clearances from HMRC.
“This is a fairly complex process and there were a number of obstacles that we had to overcome, but Andy provided the expertise we needed.”
Simon added: “With the plans we have to put on an even bigger and better Geronimo Festival next year and launch a teenage music festival, we will almost certainly be looking to raise further investment. We will once again be asking Andy to provide the specialist support we will require to make this happen.”
Andy Wood said: “EIS and SEIS offer investors a fantastic incentive to invest in ambitious, fast growth businesses such as Geronimo. We were delighted to work with Simon and his team to help put in place the finance needed to continue to grow this unique and ambitious company.
“EIS was introduced over 20 years ago to help smaller, higher risk trading companies to raise finance by offering a range of tax reliefs to investors. SEIS was introduced in 2012 to complement EIS and recognises some of the difficulties very early stage companies face in attracting investment, offering tax relief at a higher rate than EIS.”
Since EIS was launched, more than 24,500 companies have received investment and over £14billion of funds raised.
In 2014/15 alone, over 2,100 companies received investment through SEIS with £168million of funds raised.
Enterprise Tax Centre has offices in Cheshire and London.
If you or your clients have any queries in relation to the Enterprise Investment Scheme or the Seed EIS scheme then please get in touch