What are the new changes to SEIS and EIS?

It’s good news for young companies and startups looking for investment.

The chancellor, Kwasi Kwarteng, announced the new government’s Growth Plan 2022 on 23 September 2022, which introduces tax cuts for people and businesses, along with a host of other policies to ‘significantly reduce inflation and support growth in the short term.’ 

One of the updates that caught our eye was the expansion of the Seed Enterprise Investment Scheme (SEIS). 

SEIS is a highly popular government-backed investment scheme that encourages investment in early-stage companies. It’s survived many governments, and our newest government has set about increasing the generosity and availability of the scheme. 

Changes to SEIS

Under the current rules, companies must: 

  • Be trading for less than 2 years
  • Have gross assets valued under £200,000 

Companies can raise up to £150,000 under SEIS. 

Under the new rules as of April 2023, companies can:

  • Be trading for up to 3 years 
  • Have gross assets valued up to £350,000 

The total amount companies can raise is increased to £250,000, and the annual investor limit will also increase from £100,000 to £200,000 to help support these changes. 

Investors can claim up to 50% of their investment back through Income Tax relief – with further tax write-offs should the business fail – amongst other attractive tax benefits.

As you can see, these changes to SEIS are all positive and will help young companies and startups grow, which in turn will lead to more jobs being created and ultimately a more successful economy. 

What about EIS? 

There haven’t been any updates to the Enterprise Investment Scheme (EIS) as of yet, however, in the Growth Plan the government stated: 

"The government remains supportive of the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) and sees the value of extending them in the future."

We’ll update this blog as and when any updates are published.