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EIS and SEIS

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The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are government initiatives designed to encourage and support private investment into SMEs, by offering some of the most attractive tax reliefs available in the UK.

EIS

The Enterprise Investment Scheme (EIS) provides valuable funding opportunities for companies. It can be an attractive option for businesses seeking capital to fuel their growth and expansion. If you wish to qualify for EIS funding you must meet specific criteria set out by HMRC. We can provide guidance on the application process in order to optimise the company’s chances of securing EIS funding.

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SEIS

The Seed Enterprise Investment Scheme (SEIS) is very similar to EIS, save that it specifically aimed at small, early-stage companies. To be eligible for this scheme, a company must have been trading for less than two years, have fewer than 25 full-time employees, and have gross assets of no more than £200,000. We can assist with all aspects of the SEIS process.

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Case Study

Seed EIS and EIS

Prototype Start up business

Intro

Companies that qualify for Seed EIS and EIS offer attractive tax reliefs for investors. Our client company was a start-up business requiring an initial £150,000 investment in order to produce a prototype specialist component. Once proof of concept is established the company would require a further £2m to take the product to market.

Issue

The banks were reluctant to finance a speculative venture so the only alternative was private equity investment.

How we solved it

We suggested venture capital finance and obtained clearance from HMRC that the company qualified for both Seed EIS and EIS status.

The Outcome

The initial investors qualified for Seed EIS income tax relief so obtained 50% tax relief on their investment. In addition the investors were also able to claim to exempt half of the amount invested from capital gains tax on a property sale in the same tax year.

The later EIS investors were able to claim 30% income tax relief on their investment and could also claim capital gains deferral relief on the amount invested if appropriate.

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Buying or
Selling a Company

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Reorganisations
& Reconstructions

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Innovative
Tax Reliefs

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EIS
and SEIS

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Employee
Share Schemes

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International
Issues

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