How to apply for SEIS and EIS advance assurance.

The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) give investors generous tax relief for investing in qualifying young companies. Advance assurance is HMRC’s optional confirmation that your company looks likely to qualify. Most UK angels will expect it before they invest.

Before you apply

• Check the company and the planned shares meet the current rules on GOV.UK, including the limits on age, size and how much can be raised. These change from time to time.
• Make sure the shares on offer are ordinary shares with no preferential rights that would break the rules.
• Know what the money will be spent on: it must be used for a qualifying business activity.

What to prepare

• A business plan describing the trade and how the money will be used.
• Financial forecasts.
• Your latest accounts, if you have any.
• The current articles of association, and drafts of any new articles or shareholders’ agreement.
• Details of the proposed investment, including any convertible instruments such as an advance subscription agreement.

Applying

Apply online through HMRC’s advance assurance service on GOV.UK. Many tech founders ask their accountant to apply for them. Allow several weeks for a response, longer at busy times, and apply before you start your round.

After you raise

Once shares are issued and the conditions are met, submit the compliance statement to HMRC so your investors receive the certificates they need to claim relief.

Common mistakes

• Applying after investors have already paid.
• Using convertible instruments whose terms do not fit the schemes. Check with your adviser.
• Vague descriptions of how the money will be spent.

This is general information, not tax advice. Rules change, so check GOV.UK and take advice from an accountant.