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HMRC should take a long hard look at how EIS is being used by these same companies. As the scheme name implies, its is there to encourage "enterprise" and "investment", yet these companies structure their EIS Funds in such a way that the investor's capital is fully covered by contracted, discounted contracts such as distribution agreements. So even if no "profit" is made, the investors get back 100% plus the 30% EIS tax relief over three years. 30% on the net 70% is a 43% return, tax free so effectively 86%. Not bad compared to 1/4% pa return in the building society, which is about the same level of risk. All courtesy of the general tax payer. And what about the true production companies seeking to find real investment to get a film or project off the ground? No chance, the available funds have all been sucked into these mega funds. Why would a financial advisor even consider presenting a real investment to a client when they can get a tidy fee off recommending just an 86% return. Action needs to be taken to stop these large funds abusing the principle of supporting venture capital with tax incentives.