In the interests of openness and transparency, B4RN’s directors have decided today to place this information in the public domain so that investors are fully aware of this situation.
Broadband for the Rural North Ltd was authorised by HMRC to issue Enterprise Investment Scheme (EIS) compliance certificates on the 2nd December 2011 making investment in B4RN withdrawable shares eligible for tax relief under the Enterprise Investment Scheme.
On the 14th October 2018 HMRC announced they would be testing our compliance with a new ‘risk to capital’ rule brought in as part of the Finance Act 2018. This rule came in to force on the 15th March 2018.
The rule states that for investors there must be a significant risk to capital greater than the net investment return. This test was introduced to avoid abuse of EIS by schemes that were structured to obtain tax relief but pose no real risk to investors.
B4RN have made a prompt and detailed response to HMRC’s enquiries and expect to receive a formal decision in early December 2018.
Whilst B4RN’s directors are confident that B4RN continues to remain eligible for EIS, HMRC have decided in the interim not to process EIS1 forms for investments made in B4RN after the 15th March 2018 until they have made their determination.
We will also be contacting investors who have invested in B4RN shares since the 15th March 2018 and who are waiting for EIS3 forms.
Barry Forde, MBE
Chief Executive Officer
Broadband for the Rural North Ltd
13th November 2018