SEIS in the UK was launched in 2012 designed to encourage inverters to finance. It is done by providing tax breaks to backup projects. SEIS acts as a powerful incentive for encouraging investors to invest. Tax relief allows individual investors to reduce the effective income tax liability to zero.
The SEIS offers great tax-efficient benefits to investors as a return for investment in an early and small stage startup business. SEIS Investment is designed to boost economic development by promoting new entrepreneurship and enterprise. A type of investment has become a most revered government-backed scheme since it was created.
Important points to consider
The opportunities for SEIS created for start-up businesses or investors looking for sourcing finance.
These are some facts that you may consider:
- SEIS places a max amount of money in a single tax year, which can be spread to several companies.
- A company raises not more than the amount through SEIS investment.
- Investment has no control of the company on receiving their capital, which must not hold over 30% stake that they invest.
- Investors are receiving 20% tax relief on the year the investment was made, regardless of the marginal rate.
- A company seeking investment should be based in the UK. It must have an enduring organization in the country.
- The company should have less than 25 employees. When the company is the parent company, it applies to the entire group.
- The company must be less than 2 years operating.
- The company must have the required amount of assets.
- The company must trade in an approved sector, a property company can’t raise any capital using SEIS.
- The Seed Enterprise Investment Scheme aims to promote entrepreneurship and kick-start the economy.
New plans designed for helping start-up and high-growth companies receive investments to make sure that remain open during the pandemic.
Important things about SEIS
There are important things that the investors must know about SEIS. The rapid start-up culture in the UK has not simply made way for the creation of a greater level of jobs, but it has impacted the economic dynamism in the country. The benefit of start-ups to the current economy, evidently, poses a lucrative opportunity to the investors.
The SEIS provides the investors with a great opportunity to invest in early-stage start-ups while benefiting from some of the generous tax reliefs available. SEIS focuses on early-stage start-ups. Also, it has eligibility standards to accommodate less established companies.