What SEIS and EIS offer
SEIS and EIS give tax reliefs to individuals who invest in qualifying early-stage companies. The reliefs belong to the investors, but whether they can claim depends almost entirely on the company: its size, age, trade, how the shares are issued and how the money is spent. That is why the company needs to get the scheme right before and after a funding round.
We work with the company and its directors. We do not give investment advice to investors or recommend whether anyone should invest, as that is regulated financial advice.
Key company conditions
For SEIS, the company must, among other things, have gross assets of no more than £350,000 and fewer than 25 full-time equivalent employees when the shares are issued, and the qualifying trade must not have been carried on for more than 3 years. The company can raise up to £250,000 through SEIS, including other de minimis state aid received in the previous 3 years.
For EIS, the company must have fewer than 250 full-time equivalent employees, and gross assets of no more than £30 million before the share issue and £35 million immediately afterwards. Most companies can raise up to £10 million in any 12 months and £24 million over their lifetime across the venture capital schemes, with different limits for some companies.
There are also rules on excluded trades, risk to capital, share rights, use of money and connections between investors and the company. The rules must continue to be met for at least 3 years after the investment, or investors can lose their relief.
How we support the company
- Eligibility review. We check the company against the conditions using your accounts, cap table, articles and business plan, and flag anything that could cause a problem.
- Advance assurance. Advance assurance is optional, but many investors expect it. We help prepare the application, including the business plan, forecasts, latest accounts, articles, register of members and evidence for the risk to capital condition. HMRC's guide to applying for advance assurance lists what is needed.
- Share issue checks. We review the timing and terms of the share issue with you and your solicitor, as an issue structured incorrectly can disqualify the shares.
- Compliance statements. After the shares are issued, the company submits an SEIS1 or EIS1 compliance statement once it meets the relevant trading or spending test. HMRC then issues certificates so investors can claim. We prepare the statement and track the deadlines.
- Ongoing monitoring. We keep an eye on changes that could affect the reliefs during the qualifying period, such as new share issues, changes of activity or a sale.
What we'll need from you
Your business plan and forecasts, latest accounts, articles of association, register of members and cap table, details of any previous investment or state aid, and a summary of how the money will be used. Good budgets and cash flow forecasts help both the application and investor conversations. Companies planning employee incentives alongside investment may also want to look at EMI share options.
We work with founders and start-ups across Kent and remotely across the UK. Send us a message with an outline of your planned round.
Frequently asked questions
Is advance assurance compulsory?
No. A company can issue shares and submit a compliance statement without it. However, many investors will not commit without advance assurance because it gives HMRC's provisional view that the investment is likely to qualify. It is not a guarantee, and it only holds if the information you gave HMRC was complete and nothing material changes.
When can we submit the SEIS1 or EIS1 compliance statement?
For SEIS, once the company has carried on the qualifying trade for at least 4 months or spent at least 70% of the money raised. For EIS, once the qualifying business activity has been carried on for 4 months. EIS1 must be submitted within set time limits, broadly 2 years from the relevant date or the end of the tax year of issue.
Can you tell our investors how much relief they will get?
We can explain how the company's compliance supports investors' relief, but we do not advise individual investors on whether to invest or on their personal tax position as part of this service. Investors should take their own advice. We can prepare the company-side documents they need, such as the information behind their certificates.
Can a company use both SEIS and EIS?
Yes. Many companies raise a first round under SEIS and later rounds under EIS. The order and timing of share issues matter, and SEIS shares normally need to be issued before EIS shares. We help plan the sequence with your solicitor so neither scheme is put at risk.
SEIS and EIS Tax Scheme Support across Kent
We help clients throughout the county, including: