Income Tax Act 2007 section 297A

The number of employees requirement

Section 297A sets out the maximum number of employees a company (or group) may have at the time shares are issued in order to qualify for EIS relief, and explains how that number is calculated.

• A single company must have fewer than 250 full-time equivalent employees (or 500 if it is a knowledge-intensive company) when the relevant shares are issued.
• If the company is a parent, the employee count is the aggregate of its own full-time equivalent employees and those of each qualifying subsidiary, and the same limits apply.
• The full-time equivalent employee number is found by counting full-time employees and adding a just and reasonable fraction for each part-time employee; directors count as employees, but staff on maternity, paternity, shared parental or parental bereavement leave, and students on vocational training, are excluded.
• The Treasury has power to change the 250 and 500 limits by regulations.