Procedures for using the scheme
- On January 4, 2014
- By admin-nz
The Seed Enterprise Investment Scheme (SEIS) is administered in HM Revenue & Customs (HMRC) by the Small Companies Enterprise Centre (SCEC). The contact details for the SCEC can be found below.
The SCEC decides if a company and a share issue qualify, and is responsible for monitoring companies to ensure that they continue to meet the requirements of the scheme for the duration of the qualifying period for any share issue.
On this page:
- HMRC assistance in advance of an issue of shares
- Formal company approval following an issue of shares
- How do I claim my tax relief?
HMRC operates an advance assurance facility for SEIS as it does for the existing EIS. This facility allows companies to submit details of their plans to raise money, their structure and their activities in advance of an issue of shares, so that the SCEC can advise on whether or not the proposed share issue is likely to qualify for relief.
Further guidance on the kind of information the SCEC will need to provide either advance assurance, or detailed advice, can be found by following the link below.
Although companies are not required to use it, we recommend using the Form SEIS(AA) to make such an application.
Companies are not required to obtain such an assurance, but companies, particularly those using the SEIS for the first time, may consider it prudent to do so. It gives an opportunity to spot any problems before shares are issued, and an assurance from the SCEC is also useful for companies to show to potential investors.
Before investors can claim any tax relief, the company must complete form SEIS1 and send it to the SCEC. Before you fill in the form please read the SEIS1 Notes.
The form contains a declaration that at the time of completion, the company has already met the requirements of the scheme to the extent that those requirements have to be met at the time of issue of the shares and to the date of the Declaration; and that it expects to meet all other requirements.
The company cannot submit an SEIS1 until either:
- it has been trading for at least four months
- if not yet trading, it has spent at least 70 per cent of the monies raised by the relevant issue of shares
If the SCEC accepts that the company, its activities, and the shares all meet the requirements of the scheme, it will issue the company with a certificate to that effect, and will supply claim forms (SEIS3s) for the company to send to the investors so they can claim tax relief.
This process must be followed for every issue of shares in respect of which it is intended SEIS relief will be claimed.
You cannot claim tax relief until the company has sent in an application form as described above. You can make a claim on your Self Assessment tax return for the tax year in which the shares were issued. If you have an SEIS3 for a year for which you have not yet received a tax return, you can request a change to your PAYE tax code, or an adjustment to any Self Assessment payment on account due. You will still have to make the claim itself on your tax return when you get it.
If the shares were issued in a year for which it is too late to make or amend a Self Assessment, or if the claim is for capital gains re-investment relief, you must also complete the claim part of the claim form and send it to your tax office.
You can claim relief up to five years after the 31 January following the tax years in which the investment was made.
Please note: this is a longer period than for most reliefs, to take account of the fact that it is partially dependent on what the company does.
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