To have both the requisite impact on early-stage enterprise and to generate a return on investment, early-stage capital must come with the ability to follow on over subsequent funding rounds as a business develops.
Source: Dr Mark Payton, Mercia Technologies
TAX RELIEF: What is a SEIS?
According to HM Revenue & Customs, a Seed Enterprise Investment Scheme (SEIS) is “designed to help small, early-stage companies raise equity finance by offering tax reliefs to individual investors who purchase new shares in those companies”.
It continues: “It complements the existing Enterprise Investment Scheme (EIS) which offers tax reliefs to investors in higher-risk small companies. SEIS is intended to recognise the particular difficulties which very early stage companies face in attracting investment, by offering tax relief at a higher rate.”
SEIS applies to shares issued on or after April 6, 2012.
HMRC notes on its website: “Income tax relief is available to individuals who subscribe for qualifying shares in a company which meets the SEIS requirements, and who have UK tax liability against which to set the relief.
“The shares must be held for a period of three years, from date of issue, for relief to be retained. If they are disposed of within that three-year period, or if any of the qualifying conditions cease to be met during that period, relief will be withdrawn or reduced.
“[Tax] relief is available at 50 per cent of the cost of the shares, on a maximum annual investment of £100,000.”
