SEIS Start-up Investment

Wednesday, March 14, 2012 16:46

Business InvestmentSEIS (Seed Enterprise Investment Scheme) is a new government incentive to help UK start-ups and young companies.

It starts in just a few weeks on April 6th, so now is a good time to start building this into your funding plan for your start-up. Or if you are an Investor, have a look to see if this will be applicable to the businesses into which you are investing.

There has been a similar incentive around for some time now (see EIS) but the SEIS is specifically targeting new companies.

The details will come out in the Chancellors budget speech next week (21st March), but these are the basic points:

  • The business must be new, or 2 years old or less, with fewer than 25 employees. It must have less than £200,000 of gross assets and not quoted on a stock market.
  • Directors or executives cannot use the scheme to invest in their own companies.
  • You can raise up to £150,000 of funding through the SEIS, but mustn’t have already raised any money under EIS or venture capital trust (VCT) schemes. This is in total not per year.

An Investor can have up to 30% of a share in the business under this scheme. The SEIS makes it attractive for an Investor to fund a start-up because of the number of tax reliefs that they would receive:

  1. Investors can claim back income-tax of 50% of the amount invested.
  2. An Investor can have a ‘capital gains tax holiday’. Capital gains tax (CGT) can be avoided on any asset sold during the financial year 2012-2013 as long as they reinvest the proceeds in a SEIS eligible start-up in the same year.
  3. The combined effect of the CGT holiday and the income tax break gives relief of up to 78% in the first year.

There is as you can imagine, a number of detail points that would need to be investigated but this should whet your appetite. It’s well worth while finding out more about the scheme either to make your new business attractive, or to maximise your investment returns.

After the chancellor has given final details next week, I’ll do a summary here and point you towards the required forms that the revenue will need to be completed.

 

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10 Responses to “SEIS Start-up Investment”

  1. George Chisanga says:

    March 15th, 2012 at 5:44 pm

    This looks to be a good scheme, what are the target business areas/sectors?
    I have had a registered company which is dormant, but was registered more than the two years qualifying period stipulated.
    I have decided to activate my company concept in July this year.
    Will I be eligible? What is the minimum investment that I should have in my own right to participate?
    Your response will be most appreciated.

  2. Steve White says:

    March 16th, 2012 at 6:17 am

    I believe that it will be eligible as it has been dormant up to now, presumably the company files dormant accounts ? The company must not be more than two years old when the shares are issued for the investment . There is no minimum investment.

  3. jackie fitzgerald says:

    March 16th, 2012 at 7:51 am

    I have added my website but it is currently under design. My company launches in May and I am the sole investor and will have only 1 employee, I would really like to receive the same detail as requested by George… where can I find this?
    Many Thanks

  4. Lee Tracey says:

    March 16th, 2012 at 11:43 am

    Sounds like a very good scheme but unfortunately there does not seem to be any facility around to suit my requirement. I have two high tech products for the international law enforcement and security market that I have currently in mothballs.  I ran out of money before I could complete the final stage and the final stage needs about £150,000.  I am now 86 and have lost the will to be involved in any company beyond technical advice so my search is for a person ( or persons ) who will start a new start-up company and take over the products and manage and run the new start-up and also raise the money it needs and make applications such as the plan suggested.  All I want is 25% of the equity, no salary but any actual expenses to be  paid.  How do I solve this problem?  

  5. Chantel Wedderburn says:

    March 16th, 2012 at 1:24 pm

    Hi, I am in the process of starting my own small women’s, clothes retail business. I am a sole trader and seeking for suitable premises and funding to set up my boutique, would I be applicable to apply?

  6. Sarah Whale says:

    March 16th, 2012 at 8:07 pm

    Sounds very interesting – I’ll look forward to reading next week’s report. Thanks for sharing.

  7. George Chisanga says:

    March 19th, 2012 at 9:40 pm

    Thanks Steve/ Jackie – as Sarah has indicated; looking forward to reading the full report hopefully it will have the necessary clout.

  8. Vitaly Vishnevsky says:

    March 22nd, 2012 at 8:57 pm

    I am interested, and have receive email regarding this proposals. But actually we are placed in European Union, @ Latvia. And we are IT company, making cross-platform 3D MMORPG game for iOS, Android and Google Native Client. Would it be possible to get investments in this case? And It is long process?

  9. David Redfern says:

    March 23rd, 2012 at 11:18 am

    @Lee Tracey

    I’m ex Police and been in business for the last 25 years, if you wan’t to have a chat let me know here and we can arrange something.

  10. Herrman Chipiro says:

    April 25th, 2012 at 3:56 pm

    I am also interested in recieving a breakdown of specific requirements to figure out if my company qualifies for available support. Poly-Quip is an international trading company(Export), Specialising mainly in Brokerage and Merchandising of UK manufactured products. The company has a variety of sectors and has so far recieved non-exclusive rights from a few local companies to supply their products to certain countries.

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