Here’s everything you need to know when dealing with your (S)EIS investment. You probably know the basics, but we know you want the details jargon-free and to the point.
Your wish is our command✨
SEIS, or Seed Enterprise Investment Scheme, and EIS, or Enterprise Investment Scheme, are incentives set up by the UK government to encourage people to invest in small businesses and start-ups.
There are tax-efficient benefits the scheme can provide for you as an investor. Specifically, we’re here to help claim your 30% (EIS) or 50% (SEIS) Income Tax Relief.
In this guide, (S)EIS refers to both SEIS and EIS.
As an investor, you get a few tax reliefs and benefits from investing in (S)EIS schemes. They’re both almost identical, but let’s get into the details.
For EIS companies these are the main ones:
SEIS is almost identical to EIS, except for two things:
Capital Gains Tax (CGT) is the tax you pay when you sell an asset for a profit.
However, for (S)EIS shares, you’ll be 100% exempt from paying any Capital Gains Tax as long as you:
This is one of the biggest reasons why (S)EIS investments are considered one of the most tax-efficient investments.
There are three ways you can claim your Income Tax relief.
We’ve partnered with Crowdcube to help you claim your (S)EIS tax relief, without the fuss. If you’re a Crowdcube investor, this one’s for you.
If you only want to claim your tax relief on its own, you can for £25 for up to 5 (S)EIS certificates. Here’s a step-by-step guide on how to get started.
If you’re claiming your tax relief through your tax return, we can help there too. Our accredited accountants will claim your tax relief for you, and sort and file your tax return. Plus, Crowdcube investors get a discount!
If you or the company you’ve invested in exits before you’ve held your shares for 3 years, you’ll be subject to something called clawback.
Clawback means that you’ll have to repay any EIS Income Tax relief you received, plus any profit you make over £6,000 will be subject to CGT.
You’ll need to speak to HMRC and inform them of the situation so you can repay the tax you owe, if any.
If the (S)EIS business fails, you’ll receive loss relief, which acts as added protection when buying riskier shares.
EIS loss relief is a type of relief available when:
Because you lost money from your investment in an (S)EIS company, you’re eligible for tax relief which allows you to reduce your tax bill.
You can claim the tax relief against your Income Tax or your Capital Gains tax. Read our step-by-step guide on (S)EIS loss for all the information you need on how and where to claim your relief.
You can also claim the loss relief if the (S)EIS company you invested in liquidates or is dissolved for genuine commercial reasons.
HMRC defines “genuine commercial reasons” as a company that “is insolvent or is likely to become insolvent”. Insolvency is similar to bankruptcy for business. It essentially means that the company cannot pay its debts or outgoing payments.
In this case, you wouldn’t be able to use our usual tax return service. Instead, contact our support team about your situation via email at [email protected] or via the live chat on our website for more guidance. You’ll be matched with an accredited accountant who will quote you separately for the work and you can get going🚀
Yes, we can!
Not only can we claim your Income Tax relief for you (separately or through your tax return) but we can also help you claim any loss relief if you need to through your Self Assessment.
If you need tax advice on your situation, you can also book a 1:1 consultation with an accredited accountant who specialises in (S)EIS.
Pro tip: You can bundle our tax return and tax advice services and save £39🎉
Our support team is also always happy to lend a hand. Get in touch via email at [email protected] or via the live chat on our website!
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