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Trades of companies had not begun to be carried on by the statutory deadline

By Mark McLaughlin, May 2026

The Upper Tribunal dismissed the appeals of the appellant companies for different reasons from the First-tier Tribunal and concluded that both companies were still preparing to trade on the deadline for needing to have begun to carry on a qualifying trade.

Individual investors sought income tax relief under the Enterprise Investment Scheme (EIS). One of the statutory conditions for EIS relief purposes was that the money raised by the appellants from the issue of shares was employed wholly for the purposes of a ‘qualifying business activity’. The appellants considered that they satisfied the condition by ‘preparing to carry on’ a qualifying trade. However, this could be a qualifying business activity only if the qualifying trade itself was ‘begun to be carried on’ by a particular deadline, which in this case was 4 April 2018. A dispute arose with HM Revenue and Customs on this point. On appeal to the First-tier Tribunal (FTT),

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