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EIS/SEIS Support

TBAT Innovation supports start-ups and early-stage businesses looking for investment, to grow and develop by two generous tax relief schemes - SEIS and EIS.

EIS Tax Relief & SEIS Tax Relief

Looking for investment to grow and develop your business? It needn’t be taxing… feel the relief!

EIS Tax Relief and SEIS Tax Relief are two generous tax relief schemes created by the UK Government, which aim to stimulate entrepreneurship and encourage investment into start-ups and early-stage businesses.

For a business: the EIS and SEIS schemes benefit you by making you a more attractive, less risky investment opportunity to investors.

For an investor: the EIS and SEIS schemes offer potentially significant income tax and capital gains reliefs when they make an investment (into an eligible start-up or business).

The Schemes

EIS & SEIS

There are two schemes: The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) – SEIS is focused on earlier-stage (seed stage) companies than EIS.

To be eligible for SEIS, a company must be raising no more than £150,000, whereas to be eligible for EIS a company can be raising up to £5 million. For investors, there are also significant differences in tax relief benefits.

How does it work for the investor?

Let’s look at an EIS example, where the investment is good and makes money:

  • Initial investment £10,000
  • Income tax relief (30% of your investment) = £3,000
  • Investment returns (after 3 years) = £20,000
  • Capital gains tax (on the sale of shares) = £0
  • Total returns = £23,000

In this example, £10,000 was invested in an EIS eligible company; hence the investor could claim income tax relief on 30% of the amount of the investment, saving them £3,000. When they sell their shares after 3 years, they benefit both from the gain in their investment, as well as having to pay no capital gains tax.

How can TBAT help with SEIS and EIS Tax Relief?

Gain Advance Assurance

Before raising your money:

Your investors will only be able to claim tax relief if you meet the conditions for EIS.

You can ask HMRC if your share issue is likely to qualify before you go ahead, this is called advance assurance. You can use this to show your potential investors that your proposed investment should qualify for a scheme…..hence providing reassurance and making it attractive to invest in your proposition.

To apply for advance assurance, provided you meet a set of criteria, you need to give information about your company (investment need, business plan, financial forecast, documents explaining your proposal to potential investors etc.).

We have worked with businesses seeking investment for years and have a successful track record in gaining advance assurances. Contact us here for further information.

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