Making the complicated, uncomplicated
SEIS & EIS Explained
At Raising Partners we thought we would clear a few things up around SEIS & EIS tax relief and why both are so important to your fundraising process.
SEIS is incredibly attractive to investors because:
- It provides them with Income Tax relief of 50% of the investment
- A Capital Gains tax-free return on their investment
- Is exempt from inheritance tax
- It protects up to 82.5% of their investment if things don’t quite pan out
Applying for SEIS is not a complicated process and simply requires you to fill out a HMRC form and send it off with all your investment assets via the post. At point of writing this, this process takes HMRC approx 45 days to approve.
IMPORTANT – The two year countdown to using your SEIS assurance begins from the moment you start trading. It is crucial if you want to use this, you use it within those two years and have the funding round closed prior to the expiration of your certification. The maximum amount covered by SEIS is £150,000 meaning any investment raised after this would not be covered by the SEIS scheme, but by the EIS scheme, provided you have advanced assurance for both.
EIS is not to be ignored and requires a separate application! EIS is a big win for investors because:
- It provides Income Tax Relief of 30% of the investment
- A Capital Gains Tax Free return on their investment
- Is exempt from inheritance tax
- It protects up to 61.5% of their investment if things don’t work out
I stress once again that applying for EIS is a separate application, however this can be applied for at the same time as your SEIS assurance. Again it is not a complicated process and simply requires you to fill out a HMRC form and send it off with all your investment assets via the post. At point of writing this process takes HMRC approx 45 days to approve.
IMPORTANT – Unlike SEIS your EIS certificate will last you 7 years and covers investors up to a £1million in investment each per financial year.
Thinking of fundraising?
If you are a business owner, you will know first hand that one of the most important things (and arguably one of the hardest) about running your business will be financing it. Whether it is raising money from friends and family, getting a loan from the bank or taking private investment from VCs. Cash is king and if you don’t have cash in your business before too long you won’t have a business.
As much as I would love there to be, over the last few years I have learnt that there isn’t a one size fits all, yellow brick road to success for raising any kind of funding for your business. Every raise, just like every pitch, every business and every team, is different.
Boutique hotel trailblazer Mr & Mrs Smith had no regrets when it checked into the crowdfunding world and saw its £1 million investment target exceeded within the first day.
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Raising Partners is an innovative investment consultancy which partners with businesses of all sizes to secure investment through angel networks, VCs and crowdfunding.
How we can help you
We provide a comprehensive service for entrepreneurs, start-ups or established businesses looking to raise equity investment. We work with companies to deliver a tailored level of service with our typical project timeline ranging between four and six months.
We’ve raised millions for businesses around the world. From AI shopping platforms to raw dog food, we’ve got a wealth of cross-sector experience.
Feel free to email us at any time if you have questions about anything seen on our website.
You can message us directly: email@example.com
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