Raising funds for new businesses has never been easy; fortunately, the Seed Enterprise Investment Scheme (SEIS) was introduced to help small, early-stage companies raise funds through individual investors by providing many tax reliefs.


Since its launching in 2012, 1.4 billion funds have been raised for thousands of UK companies with SEIS.


This article explains the six reasons why SEIS is a good investment program.


Why SEIS Is A Good Investment Program

1. SEIS Obtains more extremely generous tax breaks than EIS

The Enterprise Investment Scheme (EIS) tax reliefs are among the most generous schemes available to UK investors, and they can be one of the most tax-efficient ways to invest money.


However, Seed Enterprise Investment Scheme (SEIS) goes a step further and offers some of the most substantial reliefs available.


For instance, income tax relief is increased to 50%. For example, if you invest £12,000 in a SEIS-eligible company, write off 50% of a capital gain regardless of how it was realized.


Furthermore, because SEIS is riskier than EIS, your capital gains aren’t deferred, allowing you to reduce your capital gains tax liability by half.


Loss relief is also available, allowing you to deduct losses from your taxable income or capital gains. You can remove that loss from your chargeable gains if you sell your SEIS shares at a loss.


You can look at the summary of the differences between SEIS and EIS here.


2. SEIS Offers’ carryback’ facility

A “carryback” facility is available with SEIS investments. You can elect to treat some or all of your SEIS shares purchased in one tax year as if they were purchased in the previous tax year.


This effectively allows SEIS investors to deduct the tax relief from their previous year’s income tax. This is only possible if you have enough SEIS allowance in the tax year you’re carrying back.


3. Inheritance tax-free investments

If an investment in a SEIS-qualifying company is kept for two years and at the time of death, it should be eligible for 100% inheritance tax relief.


Assume your estate is worth less than £325,000, and you leave anything over £325,000 to your spouse, civil partner, charity, or a volunteer amateur sports club. There’s no need to pay an inheritance tax in this situation in most cases.


6 Reasons Why

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You can claim up to 100% inheritance tax reduction after owning SEIS shares for two years.

The amount you pay is determined by the value of your estate, which is determined based on your assets (cash in the bank, investments, property or businesses, vehicles, life insurance policies) minus any debts and liabilities.


4. SEIS Offers Advance Assurance

Advance subscription agreements (ASAs) are sometimes used to quickly raise capital for a company when it’s difficult to determine its value shares. It allows you to pay a subscription fee to a company early, with the shares issued later.


It allows companies to receive a provisional indication from the HMRC that they can apply for tax relief for their investors. This assures investors that the company they invest in is qualified to offer the tax benefits stipulated under the SEIS scheme.


ASA was created to give investors peace of mind that their investments would be eligible based on their information.


It enables businesses to get a preliminary indication from HMRC that they can seek tax relief for their investors. As a result, investors may rest assured that the firm they choose to invest in will receive the numerous tax benefits stated under the SEIS scheme.


5. Facilitates connections and networking

Investing in schemes such as the SEIS facilitates strong business connections and networks. These networks can help you get in touch with industry experts and soon lead to profitable investment opportunities.

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And if you’re looking or want to invest in high-potential tech startups or startup incubators. And also accelerators are great platforms to join and participate in.


These programs and events can help new startup investors like you meet other investors. While learning more about emerging tech companies and their products and services.


6. Helps the next generation of British businesses

The HMRC introduced SEIS in 2012 to encourage investment in small businesses and startups to expand and gain traction in their industry.

6 Reasons Why

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The entire point of the SEIS, which caps the amount of money a company may raise at £150,000, is for investors to help the next generation of British enterprises get off the ground.

Entrepreneurs will have an idea and be able to demonstrate that it works (or will work) to some extent. Still, they will require financial backing and general business assistance to move forward and begin implementing their growth strategy.



The UK government created SEIS to help new startups and businesses find investors while providing the best tax benefits.


If you’re interested in investing in the scheme, you can give us a call or schedule an appointment with us.


Trendscout specialises in the government initiatives of SEIS, bringing angel investors. And startup founders together to form strategic partnerships that produce profit and growth.


We have over 30 years of business expertise and a network of inventive entrepreneurs and investors. Allowing us to recognise upcoming prospects before they reach the public.

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