The Seed Enterprise Investment Scheme, also known as SEIS, has so far helped over 1,000 companies raise finance. Private investors have invested over £82 million through the scheme.
The SEIS offers tax benefits and encourages investment in small and early stage companies by reducing the risk of investing in these types of companies.
In this article in BM Magazine, “Two years on; how SEIS could help your small business” Carol Cheesman, writes about how many businesses still aren’t aware that this can be utilised – even though it was launched nearly two years ago on the 6th of April 2012.
The purpose of the scheme is to offer tax reliefs to investors in higher-risk companies that are less than two years old, have fewer than 25 employees, have gross assets of no more than £200,000 and have a permanent UK establishment. It also aims to enhance economic growth in the UK and promote entrepreneurship.
One of the key benefits of utilising the SEIS is it reduces the risk of investing in small, early stage companies. Over 50 per cent of new businesses fail in their first year, and the finance raised from the SEIS can significantly help these new companies get the start they need and help them survive in the long-term.
If you have started, or are about to start, a new business and you need external funding then it is worth considering SEIS. However, it is always advisable to get professional advice – not only to ensure that you meet all the required criteria but also to ensure that SEIS is the best way forward for your company. It has many advantages but it is not always right for everyone and once you’re registered as a SEIS company you need to make sure that you continue to fulfil the relevant criteria in order to maintain the tax benefits.