Charlie McConalogue (Donegal, Fianna Fail)
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145. To ask the Minister for Finance his plans to review the employment investment incentive scheme, EII, so as to ensure that any incentives it provides are at least equivalent to incentives available under the seed enterprise investment scheme, SEIS, in Britain; and if he will make a statement on the matter. [14689/16]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy may be aware that a comprehensive review of the Employment and Investment Incentive (EII) and Seed Capital Scheme (SCS) was carried out by my Department in 2014. A public consultation was included as part of the process and a report of the review was published on the Department's website, which can be accessed at www.budget.gov.ie/Budgets/2015/Documents/EII_Report_pub.pdf.

As a result of the review, a number of changes to the EII were made, which following receipt of EU state aid approval, came into effect from 13 October 2015. These changes included an increase in the amount that can be raised by a company in a 12 month period from €2.5 million to €5 million and an increase in the lifetime limit per company from €10 million to €15 million. The EII is generally available to all micro, small and medium-sized companies. The maximum relief available to an investor is 40% (the top rate of income tax) of the amount invested, subject to a maximum investment amount of €150,000 per annum per investor.

In contrast, the UK Seed Enterprise Scheme (SEIS) is targeted specifically at Start-Ups and permits a company to raise a maximum of £150,000 in total. While an investor can claim tax relief at a rate of 50% on their investment, the maximum investment permitted per annum is £100,000. Relief from CGT on any increase in the value of the shares is also provided in certain circumstances.

Recent statistics provided to me by the Revenue Commissioners indicate that the level of investments made under EII has increased significantly in recent years. In 2015, companies raised over €80 million through EII and more than three quarters of that funding was raised by micro-enterprises. The overall level of funding raised increased by almost 30% in a single year. Therefore, I am not convinced that the provision of additional incentives would be appropriate at the current time. My officials will however, analyse the level of job creation among firms availing of EII in advance of Budget 2017. Should any change be warranted, it will be considered as part of my preparations for the Budget and the Finance Bill.

The Deputy may also be aware that as part of Budget 2016, I announced the introduction of a revised CGT entrepreneur relief, which allows for a reduced 20% rate of CGT to be paid on the disposal of qualifying business assets up to a lifetime limit of €1 million of qualifying gains with effect from 1 January 2016. This relief is not restricted to new businesses but to be eligible for the relief there is a requirement, among other conditions, that the person must have been working in the business as a director or employee.