Seed Enterprise Investment Scheme (SEIS)

seis investment

HMRC created the Seed Enterprise Investment Scheme (SEIS) to encourage investment into small companies and startups.

SEIS was designed to encourage investment into young companies with promising growth and returns.

To be eligible, your company must have a permanent establishment in the UK and meet certain conditions. Generally, they must have been trading for no more than two years prior to issuing shares, and must spend money on qualifying trades within three years of making an investment.

Tax relief

SEIS investment offers investors a range of tax benefits, including income and capital gains tax relief. The amount of relief an individual can claim depends on their investment amount (up to PS100,000 until 6 April 2023; thereafter up to PS200,000).

The scheme also offers capital gains tax (CGT) deferral and reinvestment relief for shares in SEIS qualifying companies. Reinvestment relief allows you to reinvest any gains realised upon disposing of an asset into new shares purchased under the scheme, up to 50% of your initial investment being eligible in each case.

This tax relief can be highly advantageous, as it helps to reduce your overall taxes in the long run. Many high net worth individuals and experienced investors utilize this scheme to reduce their CGT liability – in some cases, cutting it in half!

However, you must be selective when investing in a company as it must meet several criteria to qualify for the scheme. Fortunately, HMRC provides an Advance Assurance facility to guarantee target companies meet these requirements.

When investing in a company, it is essential that you select one with an excellent track record and the ideal balance of growth and profitability. Furthermore, making sure you do not own more than 30% of its shares will prevent HMRC from granting tax breaks to your investment.

In addition to meeting these criteria, companies must submit details of their trade and financial forecasts to the Small Companies Enterprise Centre (SCEC). Furthermore, they must submit a proposal to the SCEC for shares to be issued under the scheme in exchange for investment from investors.

The SEIS tax break can save your company money, as it helps reduce the amount of income and capital gains tax you pay on any share sale. Furthermore, this scheme is an excellent way to improve profitability for your business, since it helps purchase equipment and premises needed for expansion into new markets or acquisitions.

For growing businesses, the scheme can be an advantageous solution as it helps them boost profits and minimize bank borrowing risks. Furthermore, it gives them access to a wider selection of funding options which makes launching your venture much simpler.

Long-term investment

The SEIS investment scheme offers investors a selection of long-term opportunities. These can be direct investments into an SEIS-eligible company or through an SEIS fund. Both provide tax relief and the control of a fund manager, but come with varying levels of risk.

As a general rule, when investing for long-term goals (like retirement savings or a down payment on a house), make sure your portfolio is well diversified. This is especially pertinent if you plan to invest in the stock market.

However, when investing in equities, it’s essential not to overextend yourself. The best way to do this is by investing in a diversified portfolio of index funds.

Investors seeking greater risk can opt for higher-interest short-term products like corporate bonds or CDs. These investments tend to be more secure than equities, though they may lose value over time.

However, they can still provide a good return if you are willing to hold the position for an extended period. If you are a high-net-worth investor with plenty of capital to invest, this could be an ideal option for you.

For further assistance on achieving such returns, you should speak with an independent financial adviser. They can assist in understanding the potential risks and rewards of investing and suggest a strategy that maximizes your rewards.

Finally, SEIS investors may be eligible for loss relief if their investment in an SEIS-eligible business fails. This can be especially advantageous to those who have invested in high risk opportunities as the loss relief will help to mitigate their losses to some degree.

Ultimately, the success of your SEIS investment depends on the quality and performance of your project. The WMT team will collaborate with you to guarantee that you maximize the benefits from the scheme while avoiding compliance pitfalls which could disqualify your business.

Exit strategy

As with most investments, there are no guarantees when it comes to the outcome of a SEIS investment. Therefore, it’s essential to create an exit strategy for when the time is right to exit the business.

The Seed Enterprise Investment Scheme (SEIS) offers a range of tax benefits to assist companies in growing. These include income tax reductions on income up to PS100,000; capital gains tax exemptions and tax-free growth opportunities.

SEIS can be an excellent way to launch a business, but it can be challenging to forecast what will happen after the three year program ends. Many investors focus on the tax benefits associated with investing in SEIS but fail to consider how it will operate once the program ends.

Investors have a range of exit strategies available to them, depending on your objectives, needs and timelines. Some options to consider include mergers and acquisitions (M&A), special-purpose acquisition companies (SPACs), liquidations and IPOs.

Merging or acquiring a business may be advantageous for owners who wish to keep the company in the hands of employees or family members, or simply want an easier exit from the business. It also serves as an option if the company is nearing its end of life and owners would like to sell quickly at the highest possible value.

Mergers and acquisitions can be intricate processes, so it’s essential that you have the right professionals on board for a smooth transition. These individuals should have extensive knowledge of your business as well as an understanding of its goals and mission.

When purchasing a business, it is essential to comprehend the legal ramifications of the deal. Consulting with legal professionals can help you stay away from any potential pitfalls.

Furthermore, it is crucial to comprehend your tax responsibilities after a merger or acquisition. Doing so could have considerable repercussions on your finances, especially if you are selling to another company.


Many new businesses face difficulty raising the capital needed to grow and expand. This is especially true for startups still in their early stages of development. Fortunately, SEIS and EIS exist to assist these entrepreneurs by offering generous tax reliefs to investors.

However, investing in SEIS-qualifying companies carries a high degree of risk and should not be undertaken lightly. Therefore, conducting due diligence on the companies you plan on investing in before investing any funds is absolutely essential.

In order to determine whether a company qualifies for SEIS, it must also demonstrate that it is UK-based and meets other requirements. This could include demonstrating either that they have either established a “permanent establishment” in the United Kingdom or appointed an agent who performs work on their behalf.

HMRC takes into account whether or not a company can demonstrate that it will spend all money raised from SEIS investors within three years. If not, HMRC could revoke its eligibility for the scheme and investors could lose any tax benefits they have accrued.

Seis investments can be an excellent addition to your portfolio despite potential risks. They offer various advantages, such as diversifying your investments and investing in multiple companies at once.

Asset managers usually invest funds in SEIS-qualifying companies on your behalf. They oversee the investment process, screening for companies likely to succeed and investing the funds into a diversified portfolio of SEIS-qualified firms which helps reduce risks involved with investing.

The primary risk associated with investing in shares of these companies is that their values may change due to factors such as financial performance, market conditions and other economic and political events. If an investor loses all of their invested amount, they could face substantial losses.

Furthermore, investing in these types of companies is typically illiquid and won’t be listed on a regulated stock exchange or other public market, making it more challenging for the Fund to realize its investments – particularly those belonging to unquoted firms. This makes investing into unquoted firms particularly risky.


Seed Enterprise Investment Scheme (SEIS)

seis investment

The Seed Enterprise Investment Scheme (SEIS) offers investors a tax break of up to 50% on their investment, making early-stage companies more appealing to potential investors.

To be eligible for SEIS, your business must be engaged in a ‘qualifying trade’. That means creating or developing proprietary technology.

Tax reliefs

SEIS is a tax relief scheme that offers Income and Capital Gains Tax (CGT) advantages to investors who invest in companies located in the UK. Launched in 2012 to complement Enterprise Investment Scheme (EIS), SEIS encourages private investment into smaller firms.

This scheme permits investors to receive up to PS1 million in funds over the course of a year, with 30% claimed back through Income Tax relief. Furthermore, it offers CGT relief on gains realized during that same year with a maximum exemption rate of 50%.

However, it’s essential to be aware that SEIS tax reliefs are only available to individual investors. This requires your company to be a limited company and the investment must be made directly by you rather than through a trust; additionally, all shares should be received in full and cash upon investment.

Individuals investing in a company under the SEIS may be eligible for tax relief on up to 50% of their original investment (PS100,000 for tax year ending 5 April 2016). However, this benefit may be reduced or withdrawn if the share issue does not close and/or all qualifying criteria aren’t fulfilled within three years from when they made the investment.

Additionally, SEIS shares offer loss relief. This allows you to offset any losses against gains from other assets you own – though it should be noted that these figures are for illustration only and not guaranteed.

SEIS shares are considered to be risky investments, so you should only invest if you can bear a potential total loss. They should only be undertaken by experienced investors.

Another advantage of investing through the SEIS is that if your company fails, you won’t have to pay any Capital Gains Tax on any gains acquired. Furthermore, if you sell shares and do not receive Income Tax relief on their value at that point, you may qualify for disposal relief.


The Seed Enterprise Investment Scheme (SEIS) is a tax incentive designed to assist investors in providing funding for small businesses. Individuals can claim up to PS100,000 annually by investing in qualifying SEIS company shares.

Before investing, ensure you meet the eligibility requirements set by HMRC. This way, you can be certain the company you wish to invest in meets all relevant eligibility standards.

You must ensure the funds you invest are in new, ordinary shares with no special rights attached and fully paid up in cash – regardless of whether it’s one company or more.

Another key benefit of the scheme is that you can reinvest any profits made from an SEIS company into another one, and pay no capital gains tax on them. This exemption provides full taxation instead of deferral like with EIS; however, note that you only benefit from this tax relief in the year of investment.

In addition, you may be eligible for loss relief in the year of your investment (or before), which can be offset against either income or capital gains. This is particularly useful if you have suffered a substantial loss and wish to use this against tax liabilities.

Finally, it’s essential to be aware that if your business does not meet all eligibility criteria and you decide to withdraw from the scheme, you could potentially forfeit tax relief for investors. This is because if the company invested in no longer meets qualifying criteria, then it will be excluded from the scheme and no longer eligible to apply for tax relief on behalf of investors.

You can check if your business is eligible to participate in the scheme using Advance Assurance, which you can request from HMRC. However, bear in mind that this is only a guideline and it’s essential that you consult with an accountant prior to investing in a SEIS company.

Expiry date

Generally, a seis investment can provide businesses with funds to pursue their growth plans. This could include purchasing new machinery or premises to increase production capacity or expanding into new markets. Furthermore, it helps improve cash flow and reduce risk.

However, investors must weigh several factors when investing in an SEIS company and it is always beneficial to seek legal counsel from an experienced professional. These businesses tend to be illiquid, meaning there is usually a substantial degree of risk involved.

Another essential issue to remember is that you must utilize any money raised through an SEIS investment on new trades or business activity within three years of your original subscription. Otherwise, HMRC could potentially take back any tax reliefs claimed.

Finally, remember that any Advance Assurance you receive from HMRC does not have a set expiry date; rather, it lapses when circumstances change and your company no longer meets eligibility criteria for the scheme. Therefore, make sure the funding round deal documents submitted when applying for Advance Assurance are still valid.

The current maximum SEIS investment a company can raise each year is PS150,000 (which will rise to PS200,000 from April 2023), marking an increase of two thirds on the existing limit and benefitting more than 2,000 businesses annually.

It is worth noting that a new condition applies to seed EIS investments: the company must have an objective of growth and development over an extended period. This condition, known as the risk-to-capital condition, will be key in determining whether a business qualifies for SEIS funding.

Essentially, the aim is to promote a more efficient method for small companies to raise capital while decreasing risk. This approach could prove especially advantageous for start-ups who lack the resources to secure bank funding.


Established as part of the Government’s post-2008 economic recovery strategy, SEIS is an initiative designed to motivate investors to fund startups and small businesses. Through tax benefits, the scheme helps reduce downside risk while increasing investor returns while decreasing tax liabilities for investors.

This scheme is tailored to early stage companies, and investors can subscribe for shares up to PS100,000 annually. Shares may then be re-invested at up to 50% of the amount received; any gains will not be subject to Capital Gains Tax (CGT).

In order for investors to fully take advantage of the SEIS scheme, target companies must have received Advance Assurance from HMRC. This implies they have fulfilled all criteria set out by SCEC in advance for eligibility; including their trade activities, structure, financial projections and proposal for shared capital or equity investment.

Another essential qualification is that the business does not have any EIS or VCT investments at the time of issue. This is because companies cannot raise EIS/VCT funds until after an SEIS round has been completed. Furthermore, shares must be held for three years in order to be eligible for full income tax and capital gains tax reliefs as mentioned previously.

Furthermore, the scheme permits investors to reclaim losses on their shares and offset them against income tax and capital gains tax charges. This can be a significant tax savings, particularly in light of any CGT hike which may lead to greater tax obligations for investors.

Joint owners of shares are considered to have subscribed for an equal number even if they have paid different amounts. This distinction is especially advantageous for married couples, since both partners can claim the same tax relief on a single subscription.

To qualify for tax relief on joint ownership investments, each joint owner should complete and attach SEIS3 to their CGTS summary pages on their tax return. On this form, they should include details about the investment with a clear statement stating they are claiming reinvestment relief on said investment.


Seed Enterprise Investment Scheme (SEIS)

seis investment

The Small Enterprise Investment Scheme (SEIS) offers tax benefits to investors who invest in small companies. While this initiative is open to most sectors, some exceptions apply, there are still certain industries excluded from participation.

SEIS regulations are intricate, so it’s wise to seek professional assistance before investing in an SEIS fund. Receiving advance assurance from HM Revenue & Customs is a necessary part of this process.

Tax relief

The Seed Enterprise Investment Scheme (SEIS) is a UK government-sponsored tax break designed to support small business startups and very early stage companies. This initiative helps young entrepreneurs raise capital while decreasing investor risk.

SEIS provides income tax relief of up to 50% on the value of your shares, with the option to offset this against any previous year’s taxes paid.

Depending on the size of your shares, this could translate to an effective net cost as low as PS100,000. This makes investing in a company much more cost-effective.

For those who have made a chargeable capital gain on their shares, reinvesting the proceeds into SEIS shares qualifies them to claim CGT reinvestment relief and avoid paying CGT when selling them. This could save you up to PS14,000 if the gain was worth PS100,000.

Once you receive the SEIS3 certificate from the company, you must fill out a claim form attached to it and send it along with your tax return to HMRC.

Up to five years after your shares were issued, you may claim the relief. It’s a straightforward process but ensure that your company still qualifies for the scheme at that time and all required forms have been filled out correctly.

As with all tax reliefs, the benefit is dependent on the qualifying company maintaining its eligibility and that you hold onto your shares for an adequate period to retain any tax reliefs. If your company loses this qualification or if you sell them before that point, all of your benefits may be lost.

If you’re thinking about investing in SEIS, there are numerous other advantages as well. Reinvestment and loss reliefs provide a major boost to returns regardless of whether your application is successful or not.

Exit strategy

Entrepreneurs, small business owners or startup founders must devise an exit strategy. Without one, your partners, investors or successors may face limited options in the future.

To take your business to the next level, ask yourself some key questions about yourself and its prospects. These could include how much money you hope to make when the venture succeeds; whether or not you will be able to retire with proceeds from its sale; and what type of exit strategy do you have in mind.

You may need to consider who you will be passing the business on to in the future – this could include a child or relative. It is essential to plan this transition ahead of time, as well as ensure your family can handle any stress or volatility associated with owning a business.

Another crucial question is what kind of company you wish to create. This will determine your desired exit and what actions need to be taken in order to reach it.

Some entrepreneurs opt to launch a lifestyle business, which allows them to work fewer hours and live more comfortably while earning an income. This is an ideal solution for those needing less work while saving money for when they are ready to sell their business.

Others opt for a larger company, which is often the case for established firms looking to expand and grow. Although this type of venture requires more money than smaller ventures, the investment could prove fruitful in the long run if your venture proves successful.

In many cases, the simplest way to exit a startup or early-stage company is by selling it to a financial buyer. This may take the form of a share sale, but assets like equipment or real estate could also be sold. Enlisting legal and accounting experts in Northern Virginia to assist with the sale process can increase your chances of a successful outcome.

Minimum investment

SEIS, a tax-favored investment scheme for small companies and startups, has seen tremendous success since it launched in 2009. It provides up to 50% income tax relief (up to PS100,000 per year) for investors who invest in qualifying businesses. Furthermore, any profits made from the sale of SEIS shares after three years are exempt from capital gains taxation.

SEIS investors must guarantee the company they invest in is eligible for the scheme, which requires certain criteria to be fulfilled before shares can be issued and the investor can take advantage of its advantages. For instance, the business must have an excluded trade and have not previously received venture capital investment.

For income tax relief to be valid, investors must hold SEIS shares for at least three years after they were issued. This requirement applies due to the fact that SEIS companies do not trade on the stock market and thus lack liquidity; as a result, it may be difficult to recoup your investment.

Another consideration is that most SEIS investments provide seed funding for very early stage start ups, so their value may fluctuate both up and down. This may result in lower returns than other stock market investments, so you should carefully consider if this type of investment is right for you.

Alternatively, SEIS funds and portfolios offer diversification as well as the comfort of having a professional manager research opportunities and making investment decisions on your behalf. While these tend to be more costly than individual SEIS companies, they can help reduce your exposure to losses due to one failed company.

However, SEIS funds and portfolios tend to be less liquid than stocks on the stock market and their managers’ expertise comes at a cost. Therefore, research the fund thoroughly and make sure you know exactly how much you’re paying for it.

From April 2023, the minimum investment under SEIS will rise from PS100,000 to PS200,000 – providing more investors with access to this rewarding scheme. This presents a great chance for companies that are having difficulty raising capital.

Maximum investment

SEIS is an ideal funding option for early stage companies. This specialised scheme provides tax relief to investors in qualifying companies, making it one of the most sought-after investments available.

SEIS investment allows a company to raise up to PS150,000 from an individual and receive tax relief as compensation. This money can be put towards repaying any third party loans that the business may owe or purchasing additional shares in the business.

To take advantage of this scheme, a company must be in its early stages and have a low capital base. Furthermore, they must have a permanent establishment in the UK as well as trading within an approved sector.

SEIS-eligible companies can raise up to PS150,000 this year, rising to PS250,000 starting April 2023.

Investors can receive a 50% income tax reduction on their initial investment, up to PS100,000 per individual per tax year. These savings may be carried forward into the following tax year and applied towards any unpaid income taxes from that year.

Investors in SEIS companies can claim tax relief on any gains made during the year of investment. This is in addition to any reinvestment relief provided through SEIS; however, this relief only applies if any portion of the gain has been reinvested into the company during the tax year in which it was realized.

Another advantage of SEIS is that the money raised from the sale of shares must be put towards new trades and activities in a company’s business. This is an advantageous scenario for startups since these funds can be put towards activities related to their establishment.

It is also essential to note that SEIS has stringent criteria, requiring it only invests in businesses which can reinvest the funds back into the business within three years of issuing shares. This prevents speculative buying and reselling of the shares.