I am writing to you to let you know of an important recent development regarding our Community Share Scheme.
We have been informed by HMRC that shares to be issued under the Community Share Scheme will no longer qualify for tax relief under the Enterprise Investment Scheme, or EIS.
HMRC would have been within their rights to withdraw EIS relief in respect of shares issued under the Scheme since late 2015. However, because we approached HMRC with our concerns on this matter, rather than it emerging in an HMRC audit, HMRC has confirmed that, as a concession, they will not look to withdraw relief retrospectively. This means that EIS 3 certificates issued up until 5 April 2018 will remain valid and those shareholders can continue to claim tax relief on their existing investment.
However, we are, regrettably, no longer able to make EIS relief available for future share issues.
A considerable number of investors under our Community Share Scheme invest on a regular basis. We will be writing to them shortly, to enquire whether they wish to make any change to their current payment instructions.
Shares in the Community Share Scheme are issued quarterly; no new shares have been issued since 6 April this year, and we were due to issue the next round of shares after the end of June. Shareholders who have paid for shares in that period will therefore not yet have received their shares and, because of this change, will no longer qualify for EIS relief on their investment. We will of course be contacting those shareholders individually as soon as we can with an offer to return their monies in full if they wish.
The Trust Board was in any event due to consider the future of the Community Share Scheme as we approach the end of our initial 5-year plan, and these changed circumstances will mean that we will do so as soon as we can. Despite the Club’s recent success on the field, it remains the case that ownership of a lower league football club is a financially precarious occupation. Many other clubs have owners with deep pockets who can underwrite losses and make substantial investment with a view to improving their teams’ chances of success; to enable Wycombe Wanderers to remain competitive in the medium to long term, the Trust, as the Club’s immediate owner, needs to be able to do the same. Until further notice, therefore, the Community Share Scheme will remain open for subscription, the only difference to the initial terms being the inability for investors to claim EIS relief on new investments.
The Community Share Scheme has been one very important way in which Trust members, as the Club’s ultimate owners, have enabled us to support the Club financially in recent years. The Trust directors, and indeed the Club directors, are very grateful to those investors who have to date invested over £600,000 since the scheme was launched. We will continue to work with the Club directors to ensure that they have access to the necessary financial support to maintain the recent progress, both on and off the field, whether through initiatives such as the Community Share Scheme, the 500 Club, or any other ways of raising sustainable long-term finance.
If you have any queries as to how you may be affected by the withdrawal of EIS relief on future share issues, please contact us via our special email address firstname.lastname@example.org
With best wishes – and here’s to a great season in League 1!
Wycombe Wanderers Supporters Group Limited