Creative Industry Tax Reliefs (CITR) are a collection of Corporation Tax reliefs that allow qualifying companies...
I firmly believe that every new company formed in the UK should consider SEIS as their primary business funding strategy.
In my first year as a chartered accountant in London, I processed 15 SEIS applications, saving over half a million pounds in tax. Not a bad year’s work, but there is more to do.
When I first heard of the SEIS in late 2013 I realised straight away the tax saving potential and I wanted one for myself.
Fortunately a relative of mine had started his own business that very year and I offered to invest in his company.
He did take some time to think about it, but soon came back with his terms. A silent investor, of course. No involvement in the business, even better. Just cashflow to help fund his business for three years and then, if all goes to plan, a buy back.
I had my reservations as well. What business risks did he face? A new business being run by someone new to the industry. Oh! Previously this relative of mine had a series of short careers in different industries, none of which produced much income or consistency for him. Why should this be any different?
Other business hazards went through my mind; an untrustworthy business partner, being sued for a bad job, not being any good or able to get the work.
I was, however, convinced by one simple fact: my risk was reduced. In saving 50% of my investment directly through tax savings on day one, I knew that there were no other investment opportunities out there that could match its potential.
The best savings offers might attract 3-4% fixed interest if certain criteria was met. Stocks and shares were still volatile; I was recently told that FTSE100 companies used to stay in the top 100 for 50 years, but now the average was closer to 15 years. Bonds are an unknown to me. Property seemed an option, if only
I could get hold of a large enough deposit and the markets went my way. I am not an expert in investing.
But the SEIS option is more controllable. It’s more personal. Even though I am a silent partner, and have no real say in the business at all, I can still be supportive and offer some of my skills to help the business grow.
And therein lies what I see as the positives of SEIS. You control how your tax money is being spent, by investing in our own endeavours and that of our community. We are investing in UK PLC, being entrepreneurs and being competitive in what we do.
The results are remarkable. Small business owners know the importance of having that initial funding to get them onto the first step of the ladder. Many talented individuals have started their own business recently, possibly having being made redundant, possibly because they feel that they are worth more and take the plunge As such, there are hundreds of opportunities for SEIS if you only look for them.
If you're interested in how an SEIS could help your business, please get in touch.