Changes to SEIS Advanced Assurance Scheme

In January HMRC announced changes to the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) and will no longer provide advanced assurance that a company qualifies for either scheme on a speculative basis. It is now necessary for any company applying for advance assurance to name at least one investor or fund manager who wants to make an investment.

This has created a chicken and egg situation. SEIS funds, crowdfunding platforms and business angels like to know whether a company has advanced assurance from either or both of these government-backed schemes before they will commit to an investment and yet founders and business owners are unable to seek advanced assurance unless they have an interested investor.

There is no doubt that having advance assurance for SEIS or EIS is an important stepping stone in the process of attracting investment, so what is a founder or business owner supposed to do?

Having spoken to a number of funds and crowdfunding platforms, it seems the advice for now is to provide a named individual when you apply for advance assurance but – as there is no requirement for that specific individual to complete their investment – you can provide the name of anyone considering investment provided you have their permission.  They do not actually have to complete the investment – but they pave the way for others to do so.

Read HMRC’s full advice on SEIS and EIS

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