Pixel

SEIS and EIS Excluded Activities

Gary Green
Gary Green
February 19, 2019

You must take care to avoid "excluded activities" if you want to claim SEIS or EIS relief.

Excluded activities can affect SEIS and EIS. Both schemes offer excellent tax breaks to investors and many start-ups use the schemes to raise funds.

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

Which Activities Are Excluded?

  • 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
  • Generation of electricity, heat, gas or fuel

Trades Which Don't Qualify

A trade does not qualify if it consists wholly, or substantially, of ‘excluded activities’. You can carry on some excluded activities, but they can't be substantial. In other words, they can't form more than 20% of the company’s total activities.

There are a number of further conditions which must be met in order for a business to use the SEIS or EIS schemes. For example, there is a limit on the number of employees that the investee company can have at share issue.

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. There are higher limits for ‘knowledge-intensive’ companies.

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
March 4, 2022
An Overview of EIS (Enterprise Investment Scheme) - All You Need to Know

There are several benefits for the EIS, or Enterprise Investment Scheme, to make this an interesting...

March 3, 2022
Tax Relief for Angel Investors: Gary Green's Webinar for Stakeholderz

Key Business Consultants' principal Gary Green spoke with Stakeholderz discussing the SEIS & EIS scheme and...

February 23, 2022
What Are EMI Share Schemes? All You Need to Know

If you are considering awarding shares to your employees, an Enterprise Management Incentive is often the...

January 31, 2022
Payments on Leaving Employment: How to Reduce Your Tax Liability

Normally the process for leaving employment is quick and straightforward but this is not always the...

January 17, 2022
HMRC Investigations: What You Need to Know

Discovering that you are being investigated by HMRC can be very stressful, even if you are...

January 14, 2022
Business Transactions - Guide to Planning and Executing Efficiently

There are some transactions in business that are significant and require substantial forward-planning to be a...

January 12, 2022
Why Employee Equity is an Important Issue For Every Business

Being a business leader is about being willing to embrace innovation and be flexible about how...

January 10, 2022
An Employer’s Guide to Settlement Agreements

If you need to terminate the contract of an employee, a properly drafted settlement agreement can...

January 7, 2022
Taxation of Private Company Shares - What Should You Know?

Many companies opt to reward their employees with shares or options because of the manifold benefits...

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 © 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