SEIS Tax Relief Extension 2023

From 6th April 2023, companies can take even bigger advantage of SEIS – a popular start-up and scale-ups scheme – due to the increased limits in investment size and tax relief claims.

Last year in September, the UK government announced a few upcoming changes to the Seed Enterprise Investment Scheme (SEIS). Despite some of the U-turns after this mini-budget, the proposed SEIS changes stayed in the government’s plans and this month came into effect.

Implemented changes

Below are the recent changes from companies perspective:

• Companies are now able to raise £250,000 in SEIS (previously the limit was £150,000);
• Companies are now also able to raise SEIS within the first 3 years of trading (previously it was 2 years)
• The company must have less than £350,000 in gross assets to qualify (previously the amount was £200,000)

And here are the recent changes from investors’ perspectives:

• Investors previously were limited to investing a maximum of £100,000 per year in SEIS, and up to £1 million in EIS. That is now increased to a personal investor limit of £200,000 per year.

Important to remember

It is important to note that under the current legislation if a company has already received EIS or VCT funding, it cannot receive any further SEIS investment, even if it is with the revised age and gross assets limits for SEIS.

In addition, HMRC will not be able to provide advance assurance or approve SEIS1 submissions for the increased limits until the Finance Bill is substantially enacted and receives Royal Assent (which usually takes place in July).

This extension is very welcome news for start-ups and scale-up businesses. They will help minimise risk for investors as well as expand the opportunities for innovative UK companies to access additional funding.

Additional information

For more information about recent changes, please visit the official government website. We also have more in-depth blogs on:

1) How SEIS/EIS schemes work.

2) The differences between:

– SEIS (Seed Enterprise Investment Scheme);

– EIS (Enterprise Investment Scheme);

– and VCT (Venture Capital Trust).

3) New requirements for companies obtaining Advanced Assurance under SEIS/EIS schemes.

Need support with your application?

We have extensive knowledge of various tax relief schemes including SEIS.

The rules governing whether a start-up company qualifies under any of these schemes can be complex. They depend on an assortment of factors like gross asset value and employee numbers.

 If you need support when applying for SEIS, please get in touch with our team of experts.