SEIS Advance Assurance: a must-have for every Startup
For those in the #startup ecosystem, whether in an #advisory role or as an #entrepreneur, #SEIS is a well-known and desirable acronym.
If you are launching your startup, SEIS is a most desirable acronym.
It stands for 𝐒𝐞𝐞𝐝 𝐄𝐧𝐭𝐞𝐫𝐩𝐫𝐢𝐬𝐞 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐒𝐜𝐡𝐞𝐦𝐞 and allows your start-up company to offer its shares with a generous 50% tax relief. This means that any future investors buying shares in your company will see half of their investment deducted from their income tax. In addition, any capital gains on the shares, if sold after three years, will be CGT-exempt.
Needless to say, this gives your startup business an edge over other businesses. After all, who wouldn’t want to invest spare money in a start-up and have their tax bill slashed too?
There are several conditions to be met but, as a general rule, a start-up can use the SEIS incentive for up to £250,000, which may be restricted if the business has already benefitted from other de minimis state aids or venture capital relief schemes in the last three years.
SEIS applies to any company carrying on a qualifying trading activity, as long as the relevant conditions are satisfied.
As a preliminary reassurance to potential investors, start-ups apply for the so-called 𝐀𝐝𝐯𝐚𝐧𝐜𝐞 𝐀𝐬𝐬𝐮𝐫𝐚𝐧𝐜𝐞, which provides early confirmation that investors will be able to benefit from the above tax relief (assuming all subsequent compliance requirements are met).
To obtain the Advance Assurance, substantial documentation must be submitted, including a business plan and a certification regarding the company’s risk status.
At Bolasco Consulting we help entrepreneurs devise winning business strategies, develop professional business plans, and start their company.
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