How do you claim SEIS and EIS income tax relief?

 

As an individual, investing in early-stage companies means you can often benefit from SEIS and EIS tax reliefs

Once you’ve invested, either directly into a qualifying venture or through an SEIS/EIS Fund like ours, the next step is to claim your income tax relief. 

Here are some key pointers on what to expect.

 

 

1) When should I expect to receive my SEIS3 or EIS3 certificates?

 

To claim your SEIS or EIS income tax relief you will require a unique investment reference (UIR) which is found on your SEIS3 and EIS3 certificates. Investee companies go through a compliance application to HMRC to obtain these, but must have first met one of the following conditions before they can apply:

  • carried out their qualifying business activity for 4 months
  • spent at least 70% of the amount raised by the relevant share issue

On average, we find it takes companies approximately 3-6 months from investment to obtain and issue the relevant certificates. However the actual timelines may vary depending on individual company circumstances. 

 

2) How do I know which tax year my SEIS and EIS certificates are for?

 

SEIS3 and EIS3 certificates are associated with the tax year shares are issued by the corresponding companies – not the date of the investment or the date certificates are issued.

 

3) How do ASAs work for SEIS and EIS tax relief?

 

ASAs are advanced subscription agreements. This means that shares in a company that raises money via an ASA will be issued once the company raises their next round of funding or at a pre-agreed longstop date. 

The SEIS3 and EIS3 certificates for ASAs are valid for the tax year in which the relevant shares are issued – not the date of the ASA. 

 

4) What is ‘carry back’ for SEIS and EIS? 

 

SEIS and EIS investments offer a ‘carry back’ facility. This means that you can offset the tax relief against income tax from the previous year – so long as you have enough SEIS allowance in the year you want to ‘carry back’ to.

(For more information, see the ‘Can you choose to have the Income Tax relief for a different year’ section of this gov.uk helpsheet.)

 

5) What if I don’t receive some SEIS or EIS certificates before I want to do my tax return for that year?

 

Certificates should still be valid for income tax relief in their associated tax year even if you receive them after you’ve done your tax return for that year. 

In this circumstance, you can complete the claim form on pages 3 and 4 of the SEIS3 or EIS3 certificates and send it to your HMRC tax office. 

 

6) Where do I make an SEIS or EIS income tax relief claim?

 

You can claim SEIS and EIS income tax relief either online when you submit your Self Assessment tax return, or by post – using pages 3 and 4 of the SEIS3 or EIS3 certificates.

 

Additional useful resources:

 

If you’re interested in investing in SEIS/EIS qualifying companies that target both financial returns and positive impact, check out our Tech For Good SEIS & EIS Fund

 

 

Please note, this should not be considered investment or tax advice. If in doubt, please consult HMRC’s full guidance on the subject, or speak to your accountant. 

BGV Investment Management Ltd is an appointed representative of Midmar Capital LLP, which is authorised and regulated by the Financial Conduct Authority. The Fund is an Unapproved Collective SEIS/EIS Portfolio managed by Midmar Capital LLP as a discretionary investment management service. The Investment Advisor is Bethnal Green Ventures. This website and the documents it makes available do not constitute an offer by the Investment Manager, the Investment Advisor or any other person to invest in the Fund or act as your investment manager or an invitation for you to offer the same. Any documents made available to you via this website may not be disclosed to any other person or used for any other purpose. Note that these documents do not constitute a prospectus and the investments referred to within are not a non-mainstream pooled investment. The Information Memorandum constitutes a financial promotion pursuant to section 21 of FSMA. Its contents have been approved for the purposes of section 21 of FSMA by the Investment Manager, Midmar Capital LLP, which is authorised and regulated by the Financial Conduct Authority. The Information Memorandum and the information contained in it are not for publication any are not to be distributed to persons outside the United Kingdom. Your attention is drawn to the Risk Warnings set out at Appendix 1 of the Information Memorandum, which you should read and consider carefully. Nothing in this website nor in the documents made available to you through it should be regarded as constituting investment, taxation, legal, regulatory or other advice. You should seek advice from an independent financial adviser authorised and regulated by the FCA before deciding whether or not to make an investment. The Investment Advisor has taken reasonable care to ensure that the facts stated in this website and the Information Memorandum are true and accurate in all material respects as at the date of publication and that there are no material facts the omission of which would make misleading any statement made in this Information Memorandum.