How can the Seed Enterprise Investment Scheme help your business?

Launched in 2012, the Seed Enterprise Investment Scheme (SEIS) aims to promote investment in early-stage, high-risk start-ups by offering tax relief incentives to individual investors.

SEIS supports businesses in raising capital during their first two years by providing attractive tax benefits to investors acquiring new shares.

Gaining SEIS approval can bolster your start-up’s standing and trustworthiness among investors and the broader business community, while also facilitating connections with potential investors, forward-thinkers, and industry leaders.

This supplementary assistance cultivates growth and progress, laying a solid groundwork for the start-up’s success.

Before applying for SEIS, it is crucial to verify if your company is eligible for funding.

Your business can use the scheme if:

• It is established in the UK
• It carries out a new qualifying trade
• It is not trading on a recognised stock exchange at the time of the share issue
• It has no arrangements to become a quoted company or a subsidiary of one during the time of the share issue
• It does not control another company unless that company is a qualifying subsidiary
• It has not been controlled by another company since the date your company became incorporated.

Your company and any of its subsidiaries must:

• Not have gross assets over £350,000 at the time when the shares are issued.
• Not be a member of a partnership agreement.
• Have less than 25 full-time equivalent employees in total when the shares are issued

Effective from 6 April 2023, the following amendments have been made to SEIS:

• The annual limits for claiming Income Tax and Capital Gains Tax re-investment reliefs have increased from £100,000 to £200,000, allowing investors to receive tax relief of up to £100,000 on eligible investments through the scheme.
• The qualifying age for a company’s “new qualifying trade” has been extended from two to three years.
• SEIS now permits qualifying companies with up to three years in business to be eligible, compared to the previous two-year limit.
• The maximum SEIS investment for qualifying companies has risen from £150,000 to £250,000.
• The “gross assets” limit at the time of share issuance has grown from £200,000 to £350,000.

SEIS remains crucial in supporting UK start-ups by offering essential aid to early-stage companies and attractive tax incentives to individual investors.

Whether you are an investor seeking promising ventures or a start-up requiring financial support, SEIS could be the ideal solution for accomplishing your objectives.