SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) are two investment schemes established by the UK government to encourage individuals to invest in small and growing companies.
Under SEIS, investors who purchase shares in eligible companies can benefit from tax incentives. They can claim income tax relief of up to 50% of the amount invested. Capital gains made on the disposal of SEIS shares after three years are exempt from capital gains tax, and loss relief is available if it results in a loss.
EIS provides similar incentives. Investors can claim income tax relief of up to 30% of the amount invested in eligible companies. They can also defer capital gains tax on gains made by reinvesting in EIS-eligible shares. Like SEIS, capital gains on the disposal of EIS shares after three years are exempt from tax, and loss relief is available.
In order to be deemed eligible for SEIS, both investors and companies must abide by the following must abide by the following:
In order to be deemed eligible for EIS, both investors and companies must abide by the following must abide by the following:
The overall benefit of SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) lies in their ability to stimulate investment in small and growing businesses. These schemes offer benefits to both investors and companies, contributing to economic growth and innovation. These benefits include:
Access to Finance: SEIS/EIS provide a source of funding for early-stage and higher-risk businesses that may struggle to secure traditional financing. The tax incentives offered under these schemes make investing in these businesses more attractive to individuals and companies, increasing the availability of capital for entrepreneurial ventures.
Investor Incentives: SEIS/EIS offer tax reliefs and incentives to investors, encouraging them to invest in early-stage companies and startups. These incentives, such as income tax relief, capital gains tax exemptions, and loss relief, reduce the financial risk associated with investing in these types of businesses, making them more appealing to potential investors.
Business Growth and Job Creation: The additional funding obtained through SEIS/EIS investments can fuel business growth, supporting innovation, research and development, and expansion initiatives. This, in turn, can lead to job creation and economic development, as these companies often require additional talent and resources to scale their operations.
Support for Innovation: SEIS/EIS focus on investing in high-risk, innovative businesses that have the potential for substantial growth. By providing financial support to these companies, the schemes promote innovation and encourage the development of new products, services, and technologies that can drive progress in various industries.
Networking and Support: SEIS/EIS often come with additional support and networking opportunities. Investors gain access to venture capital firms, angel investor networks, and other resources that can provide guidance, expertise, and valuable connections. This support ecosystem can contribute to the long-term success of these businesses.
This is a short meeting either via telephone or in person, in order to confirm if you are eligible for SEIS (Seed Enterprise Investment Scheme) or EIS (Enterprise Investment Scheme).
This is to confirm our Terms and Conditions, NDA, and Data Protection Compliance. This is a simple form which is to be signed electronically.
We require copies of your business plan, share structure, and the proposed investment plan, as well as information regarding current or potential investors.
This is where you will have a meeting with our SEIS/EIS specialist in order to discuss the process and begin the application, ready for your review.
The application will be submitted to companies house, where we will await confirmation that the application has been processed satisfactorily.
This is where advanced accounting and share structure organisation will take place in order to complete the process and provide your investors with the documentation they require.
Find Out How Much You Can Claim With Our FREE Research and Development (R&D) Tax Credits Calculator. You can even get the calculation emailed to you for future use.
The SEIS/EIS scheme is administered by HMRC! Here’s an overview of their process for claiming the SEIS/EIS:
Company Application: The company seeking SEIS/EIS approval must submit an application to HMRC, providing detailed information about the company, its activities, and its eligibility for the respective scheme. The application typically includes the company’s business plan, financial information, and any relevant supporting documents.
Review: HMRC reviews the application and assesses whether the company meets the qualifying criteria for SEIS/EIS. This review involves evaluating the company’s size, nature of trade, use of funds, share structure, and compliance with other relevant regulations.
Advanced Assurance: If HMRC determines that the company meets the requirements, they will issue an “Advanced Assurance” letter. This letter confirms that the company satisfies the conditions for SEIS/EIS and that investments made in the company may qualify for the associated tax reliefs. The Advanced Assurance is not mandatory, but it provides reassurance to potential investors and can make the investment more attractive.
Investor Certificates: Once the company has received Advanced Assurance, it can issue SEIS/EIS investor certificates to individuals or companies investing in the company. These certificates confirm that the investment qualifies for the tax reliefs under SEIS/EIS and will be required for investors to claim the associated tax benefits.
Self-Assessment Tax Return: Investors must include details of their SEIS/EIS investments in their self-assessment tax returns. They will need to provide information about the amount invested, the company in which they invested, and any relevant SEIS/EIS certificates.
Claiming Tax Relief: Investors can claim income tax relief, capital gains tax exemptions, or other reliefs associated with their SEIS/EIS investments when submitting their tax returns. The specific process for claiming these reliefs may vary, and investors should carefully follow the instructions provided by HMRC.
SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) offer many different benefits to both investors and companies. The benefits for investors include:
Income Tax Relief: Investors can claim income tax relief on their investment amount, up to 50% for SEIS and up to 30% for EIS, subject to certain limits. This reduces their overall tax liability for the year in which the investment is made.
Capital Gains Tax Exemption: Any gains made on the disposal of SEIS/EIS shares after holding them for at least three years are exempt from capital gains tax. This can result in significant tax savings for investors.
Capital Gains Tax Deferral (EIS): For EIS, investors can defer capital gains tax on gains made from the disposal of any asset by reinvesting the gain in EIS-eligible shares. This allows them to postpone the tax liability.
Loss Relief: If the investment results in a loss, investors may be able to offset that loss against their taxable income or capital gains, reducing their overall tax liability.
SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) offer many different benefits to both investors and companies. The benefits for companies include:
Network and Support: The schemes often come with additional support and networking opportunities through venture capital firms, angel investor networks, and other entities involved in the SEIS/EIS ecosystem, which can provide valuable guidance and expertise.
Contact us today to find out if you are eligible for SEIS or EIS