EIS & SEIS Funding
What is SEIS Funding and how does it work?
The Enterprise Investment Scheme (EIS) and The Seed Enterprise Investment Scheme (SEIS) are schemes which help companies to raise money to help grow their business by providing tax relief to individuals who invest. These schemes are known as tax- advantaged investments.
Companies can raise a lifetime maximum of up to £12 million from tax-advantaged investments, subject to a 12-month limit of £5 million. The lifetime maximum that can be raised through SEIS funding is £150,000. Investors will be able to obtain Income Tax and Capital Gains Tax relief on their investments if they are eligible.
Is my business eligible?
There are several requirements for EIS and SEIS funding. Such as:
- The Company is required to to be an independent company which trades in the UK.
- Must have of less than £15 million before the share issue and £16 million immediately afterwards.
- The company must also have less than 250 full time employees.
- The Company is required to be an independent company which trades in the UK.
- Must have assets of less than £200,000
- The company must also have less than 25 full time employees.
Certain trades are specifically excluded from EIS and SEIS such as property development, hotels, farming, market gardening and legal or accountancy services. Qualifying companies must also have a permanent establishment in the UK and not be listed on a recognised stock exchange. Your company must have carried on the trade for which the money was raised for at least 4 months in order for an investor to be eligible for EIS relief.
Common questions asked about EIS & SEIS Funding
- Am I eligible for EIS/SEIS?
Not all companies are eligible to register for EIS/SEIS status. There are a number of qualifying conditions that your company must satisfy, including that you are an independent company trading in the UK, and restrictions on your asset values prior to undertaking investment. There are also a number of criteria that needs to be met by investors to receive their tax relief.
- Why should I undertake EIS/SEIS Funding?
EIS/SEIS funding is a great way to attract investors to your company. It is win-win for your company and your investors, as your company will receive an injection of funds and your investor could be eligible for tax relief, which isn’t usually available for standard investments.
- How much funding can be raised?
Your company will be able to raise up to £12 million from tax-advantaged investments over its lifetime, subject to a 12-month limit of £5 million. For SEIS there is a lifetime maximum of £150,000 that can be raised for each company.
- How much time will it take to set up?
There are several steps that you will have to follow to acquire your EIS/SEIS approval, depending on the requirements it can take between 2 – 6 months to get approval from HMRC from start to finish.
- Will the investors have control over my company?
Not if you do not want them to.
How can Ad Valorem help with obtaining EIS/SEIS Funding?
- We can help you with every aspect of registering your company for EIS/SEIS funding.
- We can check your company’s eligibility and apply for Advance Assurance which ensures that your investors will receive the tax reliefs if they are eligible.
- We will also ensure that the correct compliance forms are submitted to HMRC at the right time to make sure the process is completed as soon as possible. Why should I use Ad Valorem’s services instead of doing it myself?
If you would like any further information about EIS or SEIS, please don’t hesitate to contact us to arrange a consultation with our tax specialists. Call us on 01908 219100 or drop us an email on firstname.lastname@example.org.