Are you looking for a cash injection for your startup? The Seed Enterprise Investment Scheme (SEIS) could be for you.
SEIS is a government-backed initiative that encourages investment in early-stage companies and startups by providing attractive tax reliefs for investors.
Billions of pounds have been raised since SEIS was unveiled in 2012 which has helped countless businesses get the funding they need to grow and develop.
in this article, we’ll answer the most common questions surrounding SEIS.
Who is eligible for SEIS funding?
To be eligible for SEIS funding (currently) your company must:
- Be less than two years old
- Have fewer than 25 full-time employees
- Have less than £200,000 in gross assets
Of course, there are further conditions your company must meet to be eligible for the scheme, and some trades are excluded. There are also rules for investors to maintain their tax benefits too.
The UK government announced future changes to SEIS recently, which we talk about in this article. Do check it out.
How do I apply for SEIS funding?
While advance assurance isn’t mandatory, we highly recommend applying for it before selling shares to investors.
Many investors also require advance assurance before parting with their cash, so they know the company they’re backing is eligible and they can claim their tax benefits.
To apply for SEIS/EIS advance assurance, visit HMRC's website. But before you do that, download our free SEIS/EIS guide. It contains a checklist that will take you through the prep to do prior.
If your advance assurance application is successful, you can then apply for SEIS or EIS with complete confidence.
FAQs about SEIS funding
1) How much can I claim back through SEIS?
Investors can claim back up to 50% of their investment through SEIS, subject to certain conditions.
2) How do I claim back my SEIS investment?
You will claim your SEIS tax relief back when you submit your annual tax return. You will receive an SEIS3 certificate from the company you invested in (typically a few months later), which will contain the relevant information you need to include on your tax return.
3) What are the risks of investing through SEIS?
As with any investment, there's a risk that you may not get your money back if the company you invest in fails. However, the tax relief is there to offset some of this risk.
This has been a super quick look at how to get SEIS funding for your startup. To learn more, download our free guide.