SEIS advance assurance, explained properly

An individual investing in qualifying SEIS shares can claim 50% income tax relief on up to £200,000 invested in a tax year, with capital gains tax exemption on a disposal of those shares after three years, and loss relief if the company fails. That combination is why SEIS money is often the easiest money a first-time founder will raise, and why investors are strict about the paperwork.

The main SEIS conditions at the point of the share issue are that the company is unquoted and independent, has been carrying on its new qualifying trade for less than three years, has gross assets of no more than £350,000, has fewer than 25 full-time equivalent employees, and has a permanent establishment in the UK. The trade itself must not be on HMRC's excluded activities list, which rules out things like property development, most financial services, and legal and accountancy services.

Two details catch companies out more than anything else. The first is the three-year clock, which runs from when the trade began, not from incorporation. The second is prior state aid: if the company has already had de minimis aid or a subsidised grant, it can affect what you are able to raise.

A complete application sets out the company's structure, its trade and how it makes money, the amount you intend to raise and what the money will be spent on, and how that spend grows the business. HMRC also wants the latest accounts or forecasts, the business plan, the shareholders agreement or articles if they exist, and details of at least one prospective investor.

The risk-to-capital condition sits behind all of it. HMRC is looking for a company with genuine growth intentions and real risk to the investor's money. Applications written as tax planning rather than as a growth story are where refusals come from.

We review eligibility first and tell you honestly if something needs fixing before filing. We then draft the full application pack, submit it, and handle HMRC's correspondence until the assurance letter arrives. Fixed fee of £449, and a named person you can call rather than a ticket queue.

Is SEIS advance assurance compulsory?

No. Advance assurance is optional, but most SEIS investors ask for it before wiring money, because it is HMRC's own indication that the shares are likely to qualify for relief.

How long does SEIS advance assurance take?

HMRC's published service standard moves around, but in practice most decisions land in roughly four to eight weeks from submission. Preparing a complete, consistent application is the single biggest factor in avoiding follow-up questions.

How much can a company raise under SEIS?

A company can raise up to £250,000 in total under SEIS across its lifetime, and this counts towards the overall £12 million risk finance limit.

Can we apply for SEIS and EIS at the same time?

Yes. Many companies raise the first £250,000 under SEIS and the balance under EIS, and a single advance assurance application can cover both.