If you are an early stage company, SEIS enables you to offer substantial tax savings to equity investors
SEIS is a tax-advantaged equity investment scheme, similar to the Enterprise Investment Scheme but for earlier stage companies. It is called the Seed EIS because it focuses on smaller businesses in their start-up phase or in the first two years of carrying on a 'qualifying trade'.
The SEIS is not targeted at companies themselves, but rather at individuals who are looking to invest in new companies. If they invest in qualifying companies, they get an income tax credit of 50% of the amount they invest. Additionally, the investor won’t have to pay any Capital Gains tax when they sell their shares. See the FAQs section for more detail.
Get in touch
The SEIS Full Solution Package – a complete service to get your company SEIS approved, including obtaining advance approval from HMRC so that your investors have assurance of eligibility, advice on how to structure your scheme, notifying Companies House of the share issues, providing you with the necessary board minutes and share certificates, and filling in the official forms after completion of your funding: £1395 + vat - see pricing
What information do we require? - to obtain advance assurance from HMRC, the key requirements are a business plan (or at least a good executive summary), your company's Articles, the most recent annual accounts (if any) and from 2 January 2018 HMRC requires names of the individual(s) who are expected to make the investment or the fund manager or other promoters who are to provide the investors. 'Though we do not expect the company making the application to have formalised offers of investment, we do expect the company to have approached potential investors before making the advance assurance application to determine the likelihood that they will attract actual investment'.
Our SEIS specialist is Jerry Davison, who has been awarded an EIS Diploma by the EIS Association.
Get in touch - call us on 01392 432654 or email office@millconsultancy.co.uk
Always remember that we can help growing companies in many ways - as well as obtaining SEIS and/or EIS approval, we can provide essential company secretarial services, such as shareholders' agreements, filing of annual returns and organising your share issues, and also set you up with share option schemes.
A group of six investors decide to invest £170,0000 in a young technology company.
Of the £170,000 invested £20,000 was invested by a non-UK resident, so the remaining £150,000 is eligible for SEIS income tax relief of up to 50%.
An application is made to HMRC for the SEIS certificates and these are issued within a week. No one shareholder can own more than 30% of the business.
The investors obtain £75,000 of income tax relief between them. After 3 years they are also exempt from capital gains tax on any profit on the shares.
SEIS is a great way to help entrepreneurs raise that very difficult initial funding for their business.
