Pixel

What is a Qualifying Trade for SEIS?

Gary Green
Gary Green
September 27, 2016

SEIS relief can only be applied for by qualifying individuals in a new business, carrying on a qualifying trade.

Many small early-stage companies will be able to use the SEIS to raise funds. However, it's important to make sure you meet the qualifying trades condition for SEIS.

A qualifying trade is a trade, conducted on a commercial basis, with a view to the realisation of profit. Whilst most business activities qualify there are a number of important excluded business types.

Excluded Trades

The list below indicates excluded trades. But there are other options worth considering, including separating between excluded and permitted SEIS trades. You need to put rigorous structures in place and ideally get an SEIS pre-assurance application with full disclosure.

The list of trades that are excluded for the purposes of qualifying for SEIS include:

  • Dealing with land, commodities and financial instruments
  • Property development
  • Providing legal or accountancy services
  • Financial activities such as banking, insurance, debt-factoring or any other financial activities
  • Operating or managing hotels or nursing/care homes
  • Farming and market gardening
  • Leasing or letting of assets on hire
  • Operating or managing hotels
  • Coal and steel production

Updates To The Qualifying Trades Rules

From 6 April 2016, this list extends to include all energy generation activities.

A trade does not qualify if it consists wholly, or substantially, of 'excluded activities'. A business wanting to use the SEIS to raise funds can carry on some excluded activities, but these must not form more than 20% of the company’s total activities.

There are a number of further conditions in order for a new business to use the scheme. For example, only small unquoted companies, AIM and PLUS Markets listed companies can use the scheme.

The company must have gross assets of no more than £200,000 and less than 25 full-time employees. So, the maximum a company can raise using the SEIS is £150,000.

Interested in our services?
Fill in your details and a member of our experienced team will be in touch shortly to discuss your needs.
Contact Form Demo (#1)
We adhere to strict GDPR rules and do not reveal or sell your data to any third-parties. For more, please read our Privacy Policy.
Latest Insights
October 23, 2023
PAYE Investigations

Dive into the world of PAYE investigations. Uncover the facts, implications, and insights in this informative blog

September 29, 2023
London-based accountancy business acquired by Key Business Consultants

Exciting Merger Alert: London's Reed Taylor Benedict & Benedict Leff Accountants Acquired by Key Business Consultants.

September 18, 2023
Tax Tribunals – An Overview

Dive into the realm of Tax Tribunals: A comprehensive overview shedding light on this crucial aspect of taxation.

September 2, 2023
What Is A COP8?

Learn about COP8, a tax-related Code of Practice issued by HMRC for suspected tax avoidance cases. Discover when COP8s are used and the penalties associated with them.

August 20, 2023
HMRC Compliance Checks

Navigate the complexities of HMRC compliance checks confidently. Our comprehensive guide covers everything you need to know about handling tax inspections and more.

August 6, 2023
Tax Evasion and Tax Fraud

Untangling the complexities of tax evasion and fraud. Delve into our comprehensive guide to understand the differences, consequences, and preventive measures.

June 18, 2023
Which Jobs In The UK Have The Best Salary Growth Potential?

Explore the top UK jobs with the highest salary growth potential. Uncover promising career paths and industries that offer substantial earning potential.

May 23, 2023
How To File Dormant Accounts Through Companies House

Learn the step-by-step process of filing dormant accounts through Companies House with our comprehensive guide.

May 19, 2023
Customs Declaration Service (CDS) and VAT

Discover how the Customs Declaration Service (CDS) and VAT intertwine in this insightful blog article.

View Our latest insights »
Get the latest UK tax & business news and guidance delivered straight to your inbox
Newsletter Form (#2)
We care about the protection of your data. No spam. Unsubscribe anytime.
Copyright © 2022 Key Business Consultants LLP. Reg: E&W OC389322
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram