Can film and TV companies qualify for SEIS or EIS?

The UK’s film and TV industry is at a turning point. Whilst global productions continue to pour in and showcase British talent, domestic productions are struggling to keep up with the demand.

With MPs lobbying for government intervention to better support home-grown businesses and smaller productions, grants such as the SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) are more important than ever.

These are powerful tools for early-stage businesses in the UK to attract investment, by offering potential investors significant tax reliefs. But despite the industry’s obvious need for government support, S/EIS can be unavailable to many businesses in film and TV.

The eligibility goalposts have shifted, and companies now need to prove sufficient risk-to-capital in order to qualify for the tax relief. For many companies in the film and TV industry, these new criteria have made these schemes seem off-limits.

However, some companies will still be able to qualify.

Let’s unpack what makes this industry potentially difficult to navigate, and how you can structure your company in a way that maximises the chance of approval for S/EIS.

Why are film and TV companies often excluded?

In 2018, HMRC released the risk-to-capital requirement for companies applying for S/EIS. This was introduced to help ensure that tax-advantageous investment only goes to companies that: 

• Intend to grow and develop in the long term, and 
• Pose a significant risk to the investor’s capital

In some cases, film and TV companies don’t fit the risk-to-capital mould, particularly in cases where investment is sought for a single project or production. 

This is because there is no long-term growth plan, and there is often a level of pre-agreed income through presales or media distribution.

However, this is not always so cut and dry, so will depend on how you frame the company in the eyes of HMRC.

What might come under HMRC scrutiny?

It’s not just standard film and TV production houses that can get stuck behind HMRC’s eligibility criteria. The following may also be ineligible:

• Special Purpose Vehicles (SPVs) set up to fund a single production (reducing perceived long-term growth)
  
  
• Independent production companies operating on a project-by-project basis (reducing perceived long-term growth)
  
  
• Any studio relying on presales or completion funds to fuel production (reducing perceived investor risk)
  
  
• Companies applying for Creative Industry Tax Reliefs (reducing investor risk)

Even if your business intends to produce multiple projects, this model can make it hard to prove to HMRC the kind of long-term growth they want to see under this particular criteria—but not impossible.

How can film and TV companies still qualify?

Despite the hurdles, many businesses in this industry can qualify for S/EIS if they position themselves differently.

Shifting the narrative from the nature of the project to the foundation of the business you’re building will help HMRC to get a clear picture of how you intend to grow, meeting the eligibility criteria.

Qualifying examples might include: 

• A production company developing in-house film or television series that extends beyond the first production, particularly those who are seeking investment to build their brand, infrastructure, and team.
  
  
• A company that will provide technology, editing, or back-end tools and services for the film or TV industry (such as set design, VFX and SFX).
  
  
• A studio or creative agency with a growing team and repeatable commercial services, that aren’t reliant on singular productions.

The key is to show that the investment isn’t fuelling a one-off production, rather a business designed to grow.

Maximise your chance of approval

Although this is a grey area, and each business will be structured differently depending on the tools and services you are equipped with, here are some ways you can change your narrative and improve your chances of HMRC approval: 

• Structure for long-term growth: Build a company - not just a project. Demonstrable plans to scale could be hiring permanent staff, purchasing permanent infrastructure, and developing original IP.

• Use the right language: In your advance assurance application, make sure your business is framed as high-growth and high-risk. Focus on the uncertainty and ambition of your business, rather than predictability and stability.
  
  
• Clear positioning: Where your company intends to invest money in sustainable and long-term software, teams, and tools, this should be front and centre of your application. This will help you show you have considered your extended growth plan.

What next?

If you’re a film or TV company seeking investment, S/EIS may not be totally off the table. You just need to play your cards right; show that your company is growth-focussed and exposed to investor risk. 

InVestd Raise is your tool to grow and secure investment, without the legal and administrative headaches. Speak to our specialists and grow your business with trusted support by your side.

With everything from integrated S/EIS applications and investor-ready pitch deck templates to secure data rooms and digital cap table management, InVestd Raise helps you stay focused on building your business, not battling admin.

What are you waiting for? Book a call today.