SEIS Scheme

Expert help and advice with SEIS eligibility, applications, approval, tax, advantages and pitfalls.

We provide a preliminary review on likelihood of qualifying for SEIS for a flat fee £450 plus VAT.


The HMRC approved Seed Enterprise Investment Scheme (SEIS) offers investors in UK start-ups generous tax reliefs. We offer expertise for the entire process from technical analysis on how to qualify for SEIS, obtaining HMRC approval through to providing the investment documentation for the share issue under the Seed Enterprise Investment Scheme.

 Helping you secure SEIS approval

  • SEIS starter package;
  • Why investors choose SEIS;
  • Trading requirements for SEIS relief;
  • Successful implementation of SEIS; and
  • Examples of how SEIS works.

SEIS is aimed at start up companies. HMRC recognises the risks are greater and therefore offers more generous tax reliefs than it does under EIS. EIS investment limits are higher but the tax relief is lower. Many businesses start off with SEIS and then move onto EIS once they are more established.

Seed Enterprise Investment Scheme – our starter package

We offer starter packages for the SEIS advance assurance process starting from £900 plus VAT if no articles or shareholders agreement are required; or £2,200 plus VAT for companies that do require bespoke articles or a shareholders agreement.

We also offer a “no-win, no-fee” type arrangement, where we will process the advance assurance with HMRC for the Seed Enterprise Investment Scheme but defer payment of a flat fee of £5,000 until you have received £50,000 of investment.

SEIS pitfalls

We come across many companies who have promised their investors SEIS tax relief but then find that the shares do not qualify. HMRC does not make it easy and the rules can be intricate. We have secured SEIS assurance from HMRC for many clients across many sectors over the years. Our work has given us the expertiseto help you remove stress and uncertainty.

SEIS Scheme – the popularity

Latest statistics published by the Government relating to the Seed Enterprise Investment Scheme indicate:

  • Since 2012 6,515 companies benefited from £608 million of SEIS funds.
  • In 2015-16 £170 million raised in SEIS funds alone.
  • The average investment per company under SEIS was £76,000 in 2014-15.
  • 1,680 companies (76%),  raising £144 million through SEIS, raised funds for the first time in 2015-16.
  • A large number of SEIS funded companies were in the high-tech, business services, distribution, restaurant and catering sectors.

Issues we resolve for investors into a SEIS business

We look at:

  • Shareholder rights – especially anti-dilution provisions.
  • The corporate documentation – mainly the shareholders’ agreement and articles of association.
  • We look to see how you will dispose of your investment in the short, medium and long term.
  • The ability to obtain EIS relief in the future.

Seed Enterprise Investment Scheme investor’s tax reliefs

The headline tax reliefs are:

  • 30% income tax relief for an individual – this means that if someone invests £100,000 they can offset this against £30,000 of income tax due for the current year or reclaim £30,000 income tax paid in the previous year
  • no capital gains tax is payable on sale of the shares
  • Upfront income tax relief of 50% up to an annual limit of £100,000 on qualifying shares held for more than 3 years – Note it is possible to work around the 3 year holding rule, if the shares are sold sooner. The trick is to reinvest the proceeds.
  • Relief for losses against income, less the income tax relief given on the initial investment;
  • An exemption from capital gains tax of half of realised gains re-invested in a SEIS company;
  • Investors may elect to carry back income tax and capital gains tax relief one year to maximise tax reliefs; and
  • The investor cannot be a company employee, although they can be a director.

Seed Enterprise Investment Scheme eligibility

HMRC does lay down requirements for companies to qualify for SEIS. Some of the basic requirements include:

  • The gross assets of the company must be less than £200,000 directly prior to the allotment of the new shares;
  • The business must be less than two years old;
  • The company must have fewer than 25 employees;
  • The company must not raise more than £150,000 through SEIS; and
  • There is an on-going requirement for the company and the shareholders to report to HMRC any developments impacting on SEIS.

Seed Enterprise Investment Scheme – successful implementation 

There are stumbling blocks involved in implementation. Often problems only come to light once investors have subscribed for shares thinking they can claim SEIS tax relief.

Some of the most common stumbling blocks we can help you address include:

Trade off for founders and investors – there is always a balance between the founders wishing to retain full control and attracting investors, who add value beyond their money. We discuss what protections the founders could offer investors. Most founders don’t want investors unduly interfering in the day-to-day company management. Also, we consider the long-term implications of taking new minority shareholders on board.

  • Payment for SEIS shares – this is a common reason for failure under the Seed Enterprise Investment Scheme. SEIS legislation requires that shares are issued only to investors who have paid in full. Sounds simple, but problems arise where there is delay in opening bank accounts.
  • Investor holds more than 30% of the shares – An investor may accidentally temporarily hold more than 30% of the shares, because of delays in issuing shares to other investors. There are some tricks you can use to avoid this risk.
  • Threshold breach – the 30% threshold can also be accidentally breached as the shareholding of “associates” is taken into account. If business partners, trustees or certain close relatives (spouse, parents, children, grandchildren) of an investor choose to invest in the same company and the total shareholding of the investor plus the associate exceeds 30%, the benefits of SEIS are lost.
  • Preference shares – Investors naturally look out for their own interests and might request preference shares. A preference will cause the loss of tax benefits under the Seed Enterprise Investment Scheme. The shares must be full risk, ordinary shares. If the company is wound up, the investor must rank equally with other shareholders. At best, the investor can negotiate preferential rights to dividends.
  • Tax planning for sale –  investors and companies must plan and execute the investment transactions with care. Otherwise you can inadvertently lose the relief if the statutory conditions are not met.

John Deane

John solves commercial problems for SMEs and their investors. It is said that he is unbelievably practical and seasoned in finding the right solution without too much fuss. He has an established reputation in the technology, art and media industries.

Let us take it from here

Call us on 020 7438 1060 or complete the form and one of our team will be in touch.