The Tax Break that makes you Investable

There's a pair of schemes that make UK founders far more fundable, and a depressing number of businesses set them up too late, or not at all.

SEIS and EIS give your investors generous tax relief for backing you. Handled early, they make writing you a cheque an easier decision. Both schemes do the same core job: they give your investors tax relief for putting money into your business. SEIS is for the earliest-stage companies. Investors claim back 50% of what they invest against their income tax bill, which is the most generous upfront relief of any UK venture scheme. EIS is for slightly more developed companies, at 30%, and from April it got bigger: the annual raise limit doubled to £10m and gross assets thresholds rose too. These reliefs de-risk the investment for the person writing the cheque. With SEIS, if they back you and it doesn't work out, they get relief on the loss too. The downside is cushioned, yet the upside remains untouched.

The Fine Print

Your trade has to qualify, as only some activities are excluded, such as property development and financial services. The schemes are built for genuine trading companies, so if a non-qualifying activity grows beyond a fifth or so of what you do, the whole company can fall outside the rules. So if trading is your core but you also do a bit of property development on the side, that side piece alone can put your relief at risk.You will need to make sure HMRC confirm in writing that your company looks eligible, before you raise. This is called Advance Assurance and It's the document a serious investor will ask to see.

Checklist

1. Confirm your trade qualifies.

2. Check your timings. Get the share structure right; SEIS first, EIS second.

3. Ask for advance assurance early, so the relief is there the moment an investor asks.

Do this before you need it. Not when you're already doing the rounds.

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We confirm eligibility properly. We don't guess and hope it holds up. If you're thinking about raising in the next year, let's check where you stand now.

We don't guess. We guide.

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