A Smart Start to Understanding SEIS
Jumping into early-stage fundraising can feel like a maze. The good news? The Seed Enterprise Investment Scheme (SEIS) exists to cut through the red tape. It’s a government-backed investment route that makes putting money into UK startups much more appealing—and tax-efficient—for everyone involved.
In this guide, you’ll learn how SEIS works, who can qualify, and how to make the most of those juicy tax breaks. You’ll also discover how Oriel IPO’s commission-free marketplace streamlines the process, connecting founders and angel investors in a straightforward, transparent way. Ready to explore government-backed investment with a fresh approach? Revolutionizing government-backed investment opportunities in the UK
What Is the Seed Enterprise Investment Scheme (SEIS)?
SEIS is a UK government initiative designed to attract private capital into fledgling companies. It offers compelling tax reliefs to make early-stage funding a win–win.
How SEIS Works
- 50% Income Tax Relief: Invest £20,000 and slice £10,000 off your income tax bill.
- Capital Gains Tax Exemption: Hold shares for over three years and pay zero CGT on any gains.
- Inheritance Tax Relief: After two years, shares escape inheritance tax.
- Loss Relief: If your stake tanks, offset up to 45% of your loss against income tax.
- Reinvestment Relief: Reinvest capital gains into SEIS and claim up to 50% of CGT already paid.
This scheme supercharges a government-backed investment by lowering investor risk. Less risk. More reason to back your bold ideas.
Why SEIS Matters
Think of SEIS as a turbocharger for startups. More cash flows in. Talent sticks around. Ideas flourish. From biotech to clean tech, SEIS injects vital fuel into the engine of innovation.
SEIS Eligibility Criteria
To keep the scheme fair and square, both companies and investors must tick certain boxes.
For Companies
Your startup can secure SEIS funding if it:
– Is established in the UK.
– Has gross assets under £200,000 (rising to £350,000 from April 2023).
– Has fewer than 25 full-time employees.
– Has traded for under two years (three years after April 2023).
– Has not raised more than £150,000 via SEIS.
– Isn’t listed on a recognised stock exchange.
– Does not control any non-qualifying subsidiaries.
For Investors
If you want to claim those tax perks, you must:
– Be a UK taxpayer.
– Invest no more than £100,000 per tax year.
– Hold shares for at least three years.
– Not be an employee or otherwise connected to the company.
Hit these marks and you’re in. Miss one, and SEIS relief slips through your fingers.
Using SEIS Funds: Where the Money Goes
It’s not a free-for-all. To qualify, SEIS capital must fuel genuine growth:
– Launching or expanding a qualifying trade.
– Research and development tied to that trade.
– Prepare to undertake a qualifying trade.
Plus:
– Money must be spent within two years.
– You can’t use it to buy another firm.
– Funds should directly support business growth.
Stick to these rules and your investors keep their relief intact.
Top Benefits for Startups and Investors
SEIS is a magnet for allies. It brings in:
– Dedicated capital: Early-stage funding is notoriously tricky. SEIS sweetens the deal.
– Quality investors: Those keen on tax relief tend to stay engaged.
– Enhanced credibility: Don’t just tell investors you’re SEIS-eligible—prove it with advance assurance.
At the same time, investors enjoy a near-safety net. It’s a clear boost to any government-backed investment portfolio.
Halfway in and wondering how to tie it all together? Oriel IPO’s platform is built for this. It offers a commission-free investment marketplace specifically for SEIS and EIS deals. Every opportunity is curated and vetted, so you connect with serious backers. Discover commission-free government-backed investment opportunities
Getting Advance Assurance from HMRC
Before you pitch, get advance assurance. It’s a thumbs-up from HMRC confirming your eligibility. Here’s how to proceed:
1. Compile your business plan, accounts, and projected trading activities.
2. Complete the SEIS advance assurance form.
3. Submit to HMRC—then wait for that green light.
With that in hand, investors know those tax breaks are guaranteed. It’s a trust signal that accelerates fundraising.
What’s Changing from April 2023?
The government just gave SEIS a facelift:
– Raise up to £250,000 per year (up from £150,000).
– Qualify for three years of trading activity (was two).
– Asset ceiling jumps to £350,000.
Pro tip: Issue shares after 6 April 2023 by using a longstop date. Investors can pledge now and the scheme rules will apply once the new thresholds kick in.
How Oriel IPO Streamlines SEIS Fundraising
Oriel IPO stands out by removing friction at every step:
– Commission-free model: Keep more of what you raise.
– Curated marketplace: Only high-potential, SEIS-eligible companies make the cut.
– Educational hub: Guides, webinars and templates that demystify SEIS and EIS.
– Transparent fees: Flat subscriptions, no hidden charges.
It’s a one-stop shop for connecting with angel investors and navigating a government-backed investment landscape without the headaches.
Testimonials
“I raised my £200k SEIS round within weeks. Oriel IPO’s guide and platform made every step crystal clear.”
— Emily Trent, CEO of GreenHydro Ltd.
“The commission-free model saved us over £15k. Plus, the curated deals mean we back startups we truly believe in.”
— Raj Singh, Angel Investor
“Oriel IPO’s advance assurance walkthrough was a lifesaver. I felt supported from application to closing the round.”
— Yasmin Patel, Founder at TechForGood Co.
Final Thoughts and Next Steps
SEIS is a powerful lever for early-stage growth. It cuts investor risk and primes your startup for success. But the real magic happens when you pair it with a streamlined platform like Oriel IPO.
Ready to simplify your SEIS journey? Start your trip into government-backed investment with a partner that puts you first. Start your government-backed investment journey today
With the right scheme, the right platform, and the right support, your next funding round is within reach.
