Pixel

How Can I Make My Company Eligible for EIS/SEIS?

Gary Green
Gary Green
February 5, 2019

The rules for both the EIS and SEIS schemes clearly state the eligibility requirements for using the schemes.

Raising finance is not just a matter of meeting the eligibility requirements. You also have to ensure that your business can attract investors. However, the two work together. A company eligible for EIS or SEIS will be a more tempting investment opportunity.

Qualifying Conditions

The main conditions that a company must meet in order to obtain SEIS/EIS qualifying status are:

  • The maximum amount of funds that a company can raise through investments qualifying for SEIS is £150,000. Under the EIS the maximum is £5m in any 12 months with a maximum of £12m over the lifetime of the company. There are higher limits for ‘knowledge-intensive’ companies.
  • There is a maximum limit on the number of employees that the investee company can have when shares are issued. The company must have less than 25 full-time employees for the SEIS and less than 250 full-time employees for the EIS or their part-time equivalents. For groups of companies, the limit applies across the group. Again, there are higher limits for ‘knowledge-intensive’ companies.
  • The company’s gross assets (or of the group assets where the company is a parent company) must be less than £200,000 at the time of a relevant SEIS share issue. For the EIS, the company must not have gross assets worth more than £15 million before any shares are issued and not more than £16 million immediately afterward.
  • There are also time limits as to when investments can be raised by the company and how and when the money must be spent.
  • The company cannot have received any investment under either the EIS or VCT scheme before using the SEIS to raise investment. However, the SEIS compliments the other schemes and further investment can be raised using the EIS or VCT scheme after the SEIS.

Pre-Approval & Advanced Assurance

We would always recommend getting pre-approval from HMRC. Technically, it is just an assurance based on the information that you present to them. But it's still a good indication as to whether your company qualifies. Advance assurance service from HMRC is a discretionary, non-statutory, service.

Since January 2018, HMRC no longer provides advance assurance on speculative applications. This leaves some start-ups in a Catch-22 situation where it can be hard to attract investment without advance assurance. However, HMRC does not require the company to have formalised offers of investment. Rather, it must have some potential investors on board who are likely to invest if you get advance assurance.

We would be happy to discuss any questions you may have, contact us now.

Interested in our services?
Fill in your details and a member of our experienced team will be in touch shortly to discuss your needs.
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
May 26, 2021
The Most Common Tax Breaks for Small Businesses in the UK

A significant number of small businesses in the UK do not take full advantage of HMRC-approved...

May 24, 2021
The Complete Small Business Checklist for Hiring Your First Employee

There are a multitude of rules and regulations that you must be aware of when you...

May 21, 2021
Dealing With a Deceased Person's Estate - With or Without a Will

Everything you need to consider when dealing with a deceased person's estate and paying the relevant...

May 19, 2021
All You Need To Know About Workplace Pensions

A workplace pension is a pension scheme offered to employees by employers. Some workplace pensions are...

May 17, 2021
Tax Rates, Thresholds & Allowances for Employers in 2020-21/2021-22

All the tax rates, thresholds and allowances set by HMRC that employers should be aware of...

May 14, 2021
How to Fill Out a PAYE Settlement Agreement (PSA) Form: P626 & PSA1

A PAYE Settlement Agreement (PSA) allows employers to make one annual submission and payment to cover...

May 13, 2021
How Easy Is It to Get Funding as a Startup in the UK?

Financing a new startup business is one of the most crucial aspects of helping a new...

May 12, 2021
Benefit in Kind (BIK) Tax Rates: Calculating Tax on Employee Company Cars

The tax benefits of driving a company car have been steadily reduced over many years. Most...

May 11, 2021
The Essential Guide to Tax Relief Rates on Pension Contributions

You can claim tax relief for your private pension contributions worth up to 100% of your...

View Our latest insights »
Get the latest UK tax & business news and guidance delivered straight to your inbox
We care about the protection of your data. No spam. Unsubscribe anytime.
Copyright © 2021 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