If you’re a newly formed business looking for investors SEIS may be able to help.
SEIS or as its known Seed Enterprise Investment Scheme is a way for newly formed businesses to get investors to invest in their company; not many people want to invest in a new business due to the risk that would be involved with it.
The government will take some of the risk away from investors, which will be more beneficial for both investors and small companies, as these companies can get money to fund projects to grow their business.
SEIS provides the investor with a tax relief of 50% of what they have invested against their income tax liability, this will then be able to reduce the investors taxes. If the business that the investor invests in makes a loss then the amount that has been lost can be offset from their income tax at the percentage you pay income tax. But if the company makes a profit then the investor is exempt for any capital gains tax, which means that they do not pay anything on the amount that they have gained if the shares have been held for at least 3 years.
The maximum you are allowed to invest annually and receive the relief is £100,000.
You cannot claim the relief if you have more than 30% of the shares in the company. The company must be unquoted, have 25 or less employees, gross assets up to a value of £200,000 at the point of investment, preparing to undertake a new trade, only receive £150,000 under this program and be recently incorporated.