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SEIS - The Opportunity
Newsletter issue - February 2013.
The Seed Enterprise Investment Scheme (SEIS) will have a limited life – only five years to 5 April 2017. It allows investors to receive 50% income tax relief on the amount invested and up to 28% capital gains tax relief for a limited period. Also if you make a loss on the SEIS shares you can get further income tax relief for that loss.
This sounds very attractive, but you need to be aware of the various traps and limitations of the SEIS before you commit your money. In particular SEIS can only be used to invest in small companies (asset value of no more than £200,000 and up to 25 employees), which the SEIS investor can't control. In fact the SEIS investor together with his associates must not own more than 30% of the company. Each company can raise up to £150,000 of investment under SEIS in its lifetime, and each investor can invest up to £100,000 per tax year.
The greatest amount of tax relief is achieved by reinvesting a capital gain made in the year ended 5 April 2013 in SEIS shares, when you get both the income tax relief at 50% and full exemption from tax on the reinvested gain. The SEIS shares must be eligible for income tax relief for 2012/13. This means the SEIS shares must be issued in 2012/13 or issued in 2013/14 and subject to an election to carry back the tax relief to 2012/13.
If you are thinking of investing under SEIS or using SEIS to attract an outside investor to your company, please talk to us first as there are lots of hoops to jump through.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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