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Could the Seed Enterprise Investment Scheme (SEIS) help your business grow?

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The Government’s new SEIS scheme, aimed at helping small businesses access finance, has officially come into force. Like its bigger brother, the Enterprise Investment Scheme (EIS), the SEIS is designed to stimulate entrepreneurship and kick start the economy by offering investors in smaller companies tax relief incentives in return for shares, or a stake in the company. It offers a higher rate of tax relief than the EIS in recognition that very early-stage companies face particular difficulties attracting investment. Although the scheme received Royal Assent in July 2012, the tax reliefs available will apply to shares issued on or after 6 April 2012.

Investors are able to:

  • Receive up to 50 per cent tax relief on shares in the tax year the investment is made
  • Invest a maximum of £100,000 in a single tax year, which can be distributed across a number of companies
  • Receive a maximum 30 per cent stake in the company in which they invest, although they cannot control the company
  • Also take advantage of Capital Gains Tax (CGT) holidays – on gains on shares, and a first year holiday on the gains realised on the disposal of assets in 2012-13 that are reinvested through the scheme will be exempt from CGT.

Small businesses with 25 or fewer employees and assets of up to £200,000 can take advantage of the scheme, and:

  • Raise up to £150,000 in total SEIS investment
  • Benefit from a larger group of investors with access to insider knowledge and industry expertise
  • Retain control of the business.

The Treasury hopes that up to 300 or more companies will benefit from the investment under the scheme in this first year, in turn increasing investment into these companies and contribute to a wider economic growth.

We can help with business finance and investment. Talk to us to find out more about the SEIS and other schemes.