What is SEIS & EIS Tax Relief?

What is SEIS & EIS Tax Relief?

EIS Tax Relief (The Enterprise Investment Scheme) and SEIS Tax Relief (The Seed Enterprise Investment Scheme) are government venture capital schemes. Their intention is to encourage investment into start-ups and early-stage businesses. They offer extremely attractive tax incentives. In addition there are capital gains reliefs for anyone putting money into EIS and SEIS investments.

GOV.UK – Click here for a full explanation of how the EIS Scheme works. Click here for a full explanation of how the SEIS Scheme works.

Stipulations for EIS Tax Relief:

In order to qualify for the (EIS) Venture Capital Scheme, a company must be:

  • Unlisted and not quoted on any major stock market.
  • However, they can be quoted on a market for smaller companies such as AIM or ISDX
  • 250 employees or less
  • “Small” that’s to say gross assets of no more than £15 million (before the investment)

SEIS is a more recent investment scheme. The requirements are similar. However, the differences are that a company:

  • Can only have 50 staff
  • And only £200,000 gross assets

As with any investment there is risk. Furthermore, there is no easy way to sell your shares as there is with the stock market. However, as you are starting from a lower position, the rewards are potentially higher. And small companies can grow quickly!

There are some restrictions on the type of company eligible for EIS or SEIS tax relief. 350 PPM handpicks the environmental companies it introduces to its database and the majority are EIS or SEIS compatible investments. These companies offer extremely attractive tax incentives. Moreover, they are away from the turmoil of the open stock market. The maximum you can invest any year in SEIS is £100K However, you can invest up to £1M in EIS.

350 PPM works alongside the environmental companies to take them through the four stages for commercialisation. That is to say, expansion, VC and listing. Avoiding actual energy generation many may benefit from SEIS or EIS tax relief incentives. To know more about these EIS and SEIS compatible investments, please register here.

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