How does SEIS scheme work?

The Seed Enterprise Investment Scheme (SEIS) was introduced in April 2012 by HMRC to help small, early-stage companies raise funds through individual investors by providing a series of tax reliefs on investments made into qualifying companies. SEIS companies can be invested in directly or through an SEIS fund.

What are enterprise investments?

The Enterprise Investment Scheme helps riskier companies by giving their investors federal tax relief, which acts as an incentive to investors, making the potential purchase of those companies’ shares more appealing.

What are SEIS?

SEIS is a web-based system that allows centralized, online access for writing IEPs, managing Special Education data, CALPADS reporting, and service tracking.

What is the difference between SEIS and EIS?

The key difference between the two is that SEIS is explicitly targeted at start-ups and very early-stage companies, while EIS can be used by larger and more mature companies – though these are still relatively small and young in the context of the business and corporate landscape in the United Kingdom.

Who Cannot invest in SEIS?

Restrictions on SEIS An investor who controls or owns more than 30% of the shares, voting rights or assets either the company itself or a 51% subsidiary of the company cannot claim tax relief.

Are SEIS a good investment?

The tax reliefs on offer with SEIS are among the most lucrative for investing into high-growth startups. In order to maximise returns and minimise risk, investing in a tax-efficient manner is crucial. The tax reliefs available when investing into an SEIS-eligible business include: Income tax relief of up to 50%.

What is the maximum EIS investment?

How much can I invest in EIS? The maximum amount you can invest is £1 million per tax year or £2 million, providing anything above £1 million is in ‘knowledge intensive’ investments. In theory, it’s possible to invest more.

Are EIS a good investment?

A potential win for start-ups and investors. But EIS isn’t just potentially good for the investor. It’s been pivotal in ensuring start-ups in the UK can reach their potential. Under EIS, small businesses can raise up to £5million each year, and a maximum of £12million in the company’s lifetime.

What are EIS rules?

Under EIS, you can raise up to £5 million each year, and a maximum of £12 million in your company’s lifetime. This also includes amounts received from other venture capital schemes. Your company must receive investment under a venture capital scheme within 7 years of its first commercial sale.

Who is eligible for SEIS?

A company looking to secure SEIS investment must have no more than 25 employees, whilst those looking to secure EIS investment must have no more than 250 employees. To be eligible for SEIS funding, a company must have been trading for less than 2 years.

How do you qualify for SEIS?

The following criteria must be met by the company in order to be eligible and remain SEIS compliant:

• Must be established in the UK.
• Must be fully independent.
• Must be under two years old.
• Must be unquoted before beginning SEIS (not listed on any major stock exchange)
• Must be within a qualifying trade.

How much can I invest in SEIS?

The maximum amount an individual can invest in a SEIS company is £100,000 per tax year. The maximum amount of investment that a qualifying company can receive is £150,000.

Who qualifies for EIS relief?

To qualify for this relief, income tax relief must have already been claimed – and not withdrawn by HMRC. Also, investors have to hold the shares for at least three years, and the company must remain EIS-qualifying for at least three years.

Can you raise SEIS and EIS at the same time?

HMRC’s guidance is clear that investments cannot be raised under the SEIS and EIS on the same day and that the investments must be raised in a stated order, SEIS first and then EIS. The EIS investments must always be raised at least one day after any SEIS investments.

What is the difference between VCT and EIS?

Dividends. One key difference between EIS and VCT is the tax treatment on dividends. Dividends paid out to VCT shareholders are tax free while dividends paid out to EIS shareholders are taxable. It is worth noting that dividends are much more commonly paid by VCTs than companies EIS funds tend to invest in.