{"id":10948,"date":"2012-01-11T18:41:29","date_gmt":"2012-01-11T18:41:29","guid":{"rendered":"http:\/\/www.clearbooks.co.uk\/?p=10948"},"modified":"2012-01-11T18:51:30","modified_gmt":"2012-01-11T18:51:30","slug":"seed-enterprise-investment-scheme-seis","status":"publish","type":"post","link":"https:\/\/www.clearbooks.co.uk\/blog\/seed-enterprise-investment-scheme-seis\/","title":{"rendered":"Seed Enterprise Investment Scheme (SEIS)"},"content":{"rendered":"<p>The quick summary of SEIS is that it provides a huge incentive for an investor to invest in a small business. Effectively an investment of \u00a3100k might only cost \u00a318k due to the tax relief. That&#8217;s up to 78% tax relief although the investor needs a big tax bill to start with!<\/p>\n<p>The &#8220;S&#8221; in SEIS could stand for &#8220;Supercharged&#8221; as the\u00a0<a href=\"http:\/\/www.hm-treasury.gov.uk\/d\/seed_enterprise_investment_scheme.pdf\">Seed Enterprise Investment Scheme<\/a>\u00a0is effectively a supercharged\u00a0<a href=\"http:\/\/www.hmrc.gov.uk\/eis\/\">Enterprise Investment Scheme<\/a>\u00a0(EIS).\u00a0However, SEIS is only helpful to new small businesses rather than ALL small business which just seems like backward thinking.<\/p>\n<p>Off the back of our coverage in the <a href=\"http:\/\/www.clearbooks.co.uk\/2011\/12\/20\/banks-a-do-lend-b-dont-lend-c-help-or-hinder\/\">Telegraph<\/a>, which documented our application for a \u00a31m bank loan, we were approached by a couple of private investors who were interested in making an investment via SEIS.<\/p>\n<p>Clear Books is exploring a number of funding options at the moment, however, SEIS did sound like an attractive stepping stone.<\/p>\n<p>SEIS \u00a0is due to be introduced in April this year, but Clear Books won&#8217;t qualify because of one condition: The company must be less than 2 years old at the date an investment is made. Clear Books is now 3 1\/2 years old.<\/p>\n<p>The government wants to encourage small businesses to employ additional employees and help drive down unemployment and stimulate the economy. That much is widely reported.<\/p>\n<p>SEIS targets small businesses which makes perfect sense. The following conditions are in place to ensure that only small businesses can participate in the scheme:<\/p>\n<ul>\n<li>unquoted<\/li>\n<li>permanent establishment in the UK<\/li>\n<li>fewer than 25 employees<\/li>\n<li>gross assets of less than \u00a3200,000<\/li>\n<li>independent and not control any other company<\/li>\n<li>not received any previous EIS or VCT investment<\/li>\n<\/ul>\n<p>The maximum that can be invested in a small business under SEIS is \u00a3150k, enough to employ 3 people for two years (based on average wages).<\/p>\n<p>So why the 2 year condition? Shouldn&#8217;t the scheme&#8217;s goal be to encourage investment in as many small businesses as possible so that they can employ 1, 2 or 3 extra people. Isn&#8217;t that what the government wants? Drive down unemployment and stimulate growth.<\/p>\n<p>For those small businesses fortunate enough to be relatively new, the scheme looks promising and\u00a0<a href=\"http:\/\/www.shoosmiths.co.uk\/news\/3918.asp\">Shoosmiths<\/a> provides a good summary, highlighting some of the other main points including:<\/p>\n<ul>\n<li>income tax relief of 50% is available on the amount invested<\/li>\n<li>the maximum investment per tax year per investor is \u00a3100,000<\/li>\n<li>the investor cannot be an employee of the investee company from the date beginning with the incorporation of the company and ending with the third anniversary of the date the shares were issued to the investor (\u2018qualifying period\u2019), however, they can be a director<\/li>\n<li>the investor cannot own more than 30% of the issued capital or have any loan from the company during the qualifying period which would not have been made (or would not have been made on the same terms) if the investor had not subscribed for the shares<\/li>\n<li>the money raised must be for the purposes of the qualifying business actively carried on by the company<\/li>\n<li>the money must be spent by the third anniversary of the date of issue of the shares<\/li>\n<li>the investor company must be unquoted, incorporated in the two years before the investment, have a permanent establishment in the UK, be independent and not control any other company, have fewer than 25 employees and gross assets of less than \u00a3200,000, and not received any previous EIS or VCT investment<\/li>\n<li>the maximum that a company can raise through SEIS is \u00a3150,000<\/li>\n<\/ul>\n<p>Shoosmiths also notes that perhaps the <strong>most attractive part<\/strong> of the new proposals is that there is a complete capital gains tax exemption on gains made in 2012\/13 which are re-invested in the same year under the SEIS scheme, <strong>and the fact<\/strong> that gains arising on shares on which SEIS relief has been claimed are exempt from capital gains tax.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The quick summary of SEIS is that it provides a huge incentive for an investor to invest in a small business. Effectively an investment of \u00a3100k might only cost \u00a318k due to the tax relief. That&#8217;s up to 78% tax [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-10948","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Seed Enterprise Investment Scheme (SEIS) | Clear Books<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.clearbooks.co.uk\/blog\/seed-enterprise-investment-scheme-seis\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Seed Enterprise Investment Scheme (SEIS) | Clear Books\" \/>\n<meta property=\"og:description\" content=\"The quick summary of SEIS is that it provides a huge incentive for an investor to invest in a small business. 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