Seed Investment Scheme (SEIS) expansion from April 2023

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In the mini budget on 23 September 2022, it was announced that the SEIS scheme would be expanded from April 2023. (This expansion of the rules was one of the few announcements which was retained following the subsequent U-turn statements issued more recently by the government).

How is the SEIS changing?

A number of the attributes of the scheme have been expanded as follows:

Age of the Trade

Existing rules: a company cannot issue shares under SEIS if its qualifying trade is more than two years old. (This refers to the age of the trade and the clock starts from the date the company started to trade, rather than the date of incorporation).

Amended: from April 2023 this condition will be extended to three years.

Gross assets

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Current rules: gross assets of the company in question cannot exceed £200k

Amendment: from April 2023 this limit will be increased to £300k

De minimis state aid limit

Current rules: the maximum amount which can be raised in a three-year period (via SEIS and other de minimis state aid) ending on the date of the relevant share issue, cannot exceed £150,000.

Amended: this limit will be increased to £250,000 from 6 April 2023.

Investment limit

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Current rules: the amount an investor can claim income tax relief on is restricted to £100,000 per tax year. (This relates to the qualifying investment amount, rather than the tax relief).

Amended: from April 2023 this limit will be increasing to £200k per investor

What should you consider when issuing SEIS Shares?

Discuss plans with your tax advisor early

Ensure you discuss any plans to raise equity finance with your tax advisor early in the process to ensure that investors can maximise the reliefs available and to ensure all the necessary administration of the SEIS scheme is carried out appropriately.

Ensure correct paperwork is filed

It is very important that companies ensure the correct paperwork is filed under SEIS, even if EIS shares are intended to be issued later, as filing EIS paperwork first will invalidate any later subsequent compliance statements submitted under SEIS. This will ensure investors benefit from the tax reliefs available.

Ensure robust agreement is in place

If a company is looking to raise finance now, and investors would like to make use of the expansion of the scheme and increased limits outlined above, it may be possible to have the investor pay for the share upfront in advance of April 2023, but not receive the shares until 6 April 2023. However, attention and care will need to be given so as to ensure a robust agreement is in place and that the funds are in anticipation and conditional on the issue of shares. As HMRC may seek to argue that the arrangement and funds received by the company in advance amount to a loan. Another option would be to make use of the current investment limit and then make another investment later after 6 April 2023, or a blend of SEIS and EIS share issues could also be considered.


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