Enterprise Investment Scheme and Seed Enterprise Investment Scheme

Specialist tax advice

Supporting the growth of new businesses

Our tax specialists have extensive experience in advising clients on the Enterprise Investment Scheme (‘EIS’) and the Seed Enterprise Investment Scheme (‘SEIS’). We can assist you in understanding whether your company meets the qualifying conditions to raise funds under SEIS and/or EIS and help investors claim their tax reliefs. 

EIS and SEIS are generous government schemes encouraging equity investment in new businesses by providing investors with significant income tax and capital gains tax reliefs on their investments.

If you are planning to raise funds to aid business growth, ensuring your company qualifies as an EIS or SEIS investment may substantially increase your chances of attracting investors. EIS and SEIS are designed to encourage investment into start-ups which may find it difficult to source conventional funding.

We are proud members of the Enterprise Incentive Scheme Association (‘EISA’).

Income tax and capital gains tax relief

Both the EIS and SEIS schemes offer an opportunity for investors to receive income tax and capital gains tax relief on their investment into shares in early-stage companies.  

These tax reliefs include the following: 

  SEIS  EIS 
Income tax relief 
  • Income tax relief on up to 50% of the value of investment. 
  • Income tax relief on up to 30% of the value of investment.  
Capital gains tax relief 
  • Capital gains tax exemption on the eventual sale of shares if they have been held for 3 years. 
  • Capital gains tax reinvestment relief is available when gains arising on the disposal of any asset are reinvested in shares in a company on which SEIS income tax relief is received. This relief enables an individual who has disposed of an asset to treat a maximum of 50% of the gain as exempt from CGT. The maximum amount of reinvestment relief that can be claimed is £50,000. 
  • Capital gains tax exemption on the eventual sale of shares if they have been held for 3 years. 
  • Capital gains tax deferral relief is available when gains arising on the disposal of any asset are reinvested in shares in a company on which EIS income tax relief is received. This is also available to some connected parties even if they cannot claim income tax relief. 

 

How we can help you

We can guide you through the process of helping ensure EIS/SEIS relief will be available to your investors.

Our specialists can help you understand whether your company has a reasonable prospect of qualifying under EIS/SEIS and advise on any steps you can take to help meet the legislative requirements of the schemes.  

We can also assist by seeking advance assurance from HMRC prior to your funding round. This will give you comfort on whether your company will meet the requirements of the EIS/SEIS legislation. It is not uncommon for investors to require confirmation of a HMRC advance assurance before investment is made. 

Even if you secure an advance assurance, there are steps you must take to ensure your investors can claim their income tax relief.  

You must complete and submit form EIS1/SEIS1 to HMRC. If HMRC are satisfied that the requirements of the EIS/SEIS scheme have been met, they issue the Company with an EIS2/SEIS 2 form. The Company can then issue the EIS3/SEIS3 form which the investors will need to claim income relief.  

We can assist your company by completing the EIS1/SEIS 1 application and the EIS3/SEIS3 forms on your behalf.

The SEIS/EIS legislation and application process can be complicated, and we find that is not difficult for those without experience in this area to trip up.  

We have helped clients identify historic mistakes and resolve issues successfully with HMRC. 

There are many actions that a company can take which would result in the company losing it EIS/SEIS qualifying status. In certain circumstances, actions taken by a company within the 3 years of the issue date of EIS/SEIS shares can lead to a clawback of income tax relief for the investors.  

We can provide advice to you to help you mitigate these risks.  

Our specialists can help you understand whether your company has a reasonable prospect of qualifying under EIS/SEIS and advise on any steps you can take to help meet the legislative requirements of the schemes.  

We can also assist by seeking advance assurance from HMRC prior to your funding round. This will give you comfort on whether your company will meet the requirements of the EIS/SEIS legislation. It is not uncommon for investors to require confirmation of a HMRC advance assurance before investment is made. 

Even if you secure an advance assurance, there are steps you must take to ensure your investors can claim their income tax relief.  

You must complete and submit form EIS1/SEIS1 to HMRC. If HMRC are satisfied that the requirements of the EIS/SEIS scheme have been met, they issue the Company with an EIS2/SEIS 2 form. The Company can then issue the EIS3/SEIS3 form which the investors will need to claim income relief.  

We can assist your company by completing the EIS1/SEIS 1 application and the EIS3/SEIS3 forms on your behalf.

The SEIS/EIS legislation and application process can be complicated, and we find that is not difficult for those without experience in this area to trip up.  

We have helped clients identify historic mistakes and resolve issues successfully with HMRC. 

There are many actions that a company can take which would result in the company losing it EIS/SEIS qualifying status. In certain circumstances, actions taken by a company within the 3 years of the issue date of EIS/SEIS shares can lead to a clawback of income tax relief for the investors.  

We can provide advice to you to help you mitigate these risks.  

Meet our EIS and SEIS experts

Get in touch

Get the funds you need to take your start up to the next level. Our team of specialists will guide you through every step of the EIS or SEIS process, from seeing if you qualify to helping you apply and claim tax reliefs.