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Most start-ups seeking to raise capital will want SEIS status because it makes them more investible.

So what is SEIS?

SEIS offers great tax efficient benefits to investors in return for investment in small and early stage startup businesses in the UK.
Investors receive up to 50% tax relief in the tax year the investment is made. Investors can also ‘elect’ to carry back part or all of their investment as though acquired in the tax year preceding that in which the shares were actually acquired.

Investors won’t pay any capital gains tax if the shares rise in value and are subsequently sold. Currently investors need to hold their shares for at least three year in an SEIS qualifying company to take advantage of this relief.

SEIS investors can invest a maximum of £100,000 in a single tax year and can be spread over a number of SEIS qualifying companies.

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So does my Business Qualify for SEIS status?

The rules for SEIS can become complex, but here are the highlights:

The business needs to have been trading for less than 2 years.

The company has to have a ‘qualifying’ trade – generally the company must not operate in the finance or investment sectors, e.g. a property investment company cannot raise capital through the SEIS regime.

The company’s gross assets must be no more than £200,000.

The company must have fewer than 25 employees.

A company can raise up to £150,000 under SEIS

 

How Lighthouse can help

Lighthouse provide businesses and startups with ongoing support to help obtain SEIS status. HMRC operates an ‘SEIS Advance Assurance’ service, which certifies the business is SEIS compliant. This certification lets investors know that the company meets the requirements for SEIS status. Many crowd funding websites also request copies of these certificates.
By securing Advance Assurance, we’ve found businesses are more attractive to investors keen on securing the tax incentives offered by the SEIS regime.Contact Lighthouse for more information and see how we can help.
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