Income Tax Act 2007 section 180B

The financial health requirement

Section 180B sets out the financial health requirement that a company issuing shares under the Enterprise Investment Scheme must satisfy, requiring that it is not "in difficulty" at the relevant time.

• The company issuing the shares must meet the financial health requirement at the beginning of period B (the period starting with the share issue and ending three years later, or three years after the start of the trade if later).
• The financial health requirement simply means that the issuing company must not be "in difficulty" at that point in time.
• A company is considered "in difficulty" if it would reasonably be regarded as a firm in difficulty under the EU Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty (2004/C 244/02).
• The relevant version of the Community Guidelines is that which had effect in the United Kingdom immediately before IP completion day (31 December 2020).