Seed Enterprise Investment Scheme

 

The Seed Enterprise Investment Scheme (SEIS) is an amazing tax break for people who invest in new shares in very early-stage companies. Introduced in April 2012 it is arguable (although we’ve never heard anyone argue) the most generous tax scheme ever made available to UK taxpayers.

The SEIS scheme allows you to claim up to:

50% back 72.5% back
of your investment if the company succeeds - and you pay no CGT when you sell your shares of your investment if the company fails

 

If you realised a capital gain during the 2013-14 tax year, SEIS and related reliefs allow you claim up to:

64% back 86.5% back
of your investment if the company succeeds - and you pay no CGT when you sell your shares of your investment if the company fails - allowing you to invest in a company with the potential of full downside protection

 

In this instance returns on successful investments are multiplied by over four times, while you risk nothing on unsuccessful investments! (You need sufficient tax liabilities to set your investments off against).

To learn more about how SEIS works please watch this video:

and read the HMRC guidance.

Enterprise Investment Scheme

Not quite as generous but still very good and it allows you to invest in companies beyond the very early seed stage. For more information read our blog post or HMRC guidance on EIS

ShareIn, SEIS and EIS

All of the companies on ShareIn have applied for either SEIS or EIS advance approval from HMRC.

It does requires a bit of admin from the investee companies to complete the form on an investors behalf and so we let the investee companies decide what minimum level of investment they are prepared to accept to fill in their relevant paperwork.

A human being will need to fill in a form and so investee companies don’t want to spend more money paying for the human being than they actually raise form the investment! So the minimum investment in order to claim the tax relief is typically around the £200/£300 mark – but check the specific pitch for details – it’s in the gifts part at the bottom of a pitch.