What is Seed Enterprise Investment Scheme – SEIS?
The Seed Enterprise Investment Scheme (SEIS) was introduced by HMRC in April 2012 and sits along side The Enterprise Investment Scheme (EIS). It offers investors who purchase shares in start ups or early stage businesses a range of tax reliefs designed to mitigate risk, enhance potential returns and increase the availability of risk capital for seed stage businesses.
Why was SEIS set up?
Seed Enterprise Investment Scheme was set up to complement the existing Enterprise Investment Scheme which provides investors with a range of tax reliefs when investing in small higher risk companies.
EIS qualifying companies can raise up to £5M and tend to be later stage growth companies. Whereas, SEIS is aimed at start ups and early stage businesses raising up to £150k of seed capital. The scheme addresses the particular challenges that very early stage companies face when trying to attract investment by offering individual investors tax relief at a higher rate than EIS.
Who is it for?
Seed Enterprise Investment Scheme is aimed at both Entrepreneurs and Investors. By offering investors 50% tax relief on the initial investment and capital gains tax exemption it provides one of the most tax efficient investment schemes available. For Entrepreneurs, SEIS has helped introduce more capital into the early stage investment marketplace.