Inform Accounting | (S)EIS Schemes

Investment for growth

Many businesses require investment in the early years of development. There are many ways of sourcing this finance, one of which is through an SEIS or EIS scheme.

Investing in early-stage businesses is risky for investors, so it’s no surprise that the tax breaks for investors willing to take this risk are pretty generous in order to appear more attractive.

Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme (EIS) is designed to help smaller higher risk trading companies to raise finance by offering a range of tax reliefs to investors who purchase new full-risk ordinary shares in those companies.

The tax reliefs available to investors in EIS qualifying companies are:

Income tax relief of up to 30% of the sum invested
Exemption from capital gains tax (CGT)*
CGT deferral relief
Exemption from inheritance tax
Loss relief

* provided the shares have been held for three years and income tax relief has been given and not withdrawn.

Seed Enterprise Investment Scheme (SEIS)

The Seed Enterprise Investment Scheme (SEIS) was designed to help small, early stage UK companies raise finance of up to £150,000 by offering tax relief to investors.

SEIS is largely modelled on the Enterprise Investment Scheme (EIS), but with enhanced tax reliefs to qualifying investors, which were expanded from 6 April 2023.

The tax reliefs available to investors in SEIS qualifying companies are:

Income tax relief of up to 50% of the sum invested up to £200,000
Exemption from capital gains tax (CGT)*
CGT reinvestment relief
Exemption from inheritance tax

* provided the shares have been held for three years and income tax relief has been given and not withdrawn.

Attracting investment

Where a company qualifies as an “EIS company” or an ‘SEIS company’, it can be attractive to potential investors, due to the tax breaks and can therefore assist with raising finance.

EIS and SEIS are, however, complex areas and specialist advice should be sought if you want to attract such investment. Our tax experts are on hand at every stage to guide you through what can seem like a minefield of eligibility requirements.

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Getting your business prepared for investment

If you're seeking investment through an (S)EIS scheme, you need to make sure your business is set up for investment. Our quick guide will help you get started.

Coming soon