Tax Relief

To stimulate and support entrepreneurship, Her Majesty's Revenue and Customs (HMRC) offers two tax incentive schemes for UK taxpayers who invest in qualifying startup and small, early-stage companies which have permanent establishments in the UK. Please note that investors who are not UK taxpayers are unable to take advantage of these schemes.

SEIS

The first scheme, the Seed Enterprise Investment Scheme (SEIS), encourages investment in qualifying new seed-stage startups companies by providing individuals with 50% of their investment back in income tax relief. Plus, in the 2013/2014 tax year investors can benefit from 50% capital gains tax relief on gains which are reinvested in SEIS eligible shares; this relief applied to 100% of reinvested gains in 2012/2013. Also, any gain arising on the disposal of the shares may be exempt from capital gains tax, and loss relief is available if the disposal results in a loss.

So, for investors who realised capital gains during the 2012-13 tax year, SEIS reliefs allow you claim up to:

78%

of your investment back if the startup succeeds - and you pay no CGT when you sell your shares; or

100.5%

of your investment back if the startup fails - allowing you to invest in startups with the potential of full downside protection.

If you realised capital gains during the 2013-14 tax year, SEIS and related reliefs allow you claim up to:

64%

of your investment back if the startup succeeds - and you pay no CGT when you sell your shares; or

86.5%

of your investment back if the startup fails - significantly reducing any losses you incur when investing in startups.

EIS

The second scheme, the Enterprise Investment Scheme (EIS), is designed to encourage investment in qualifying slightly later-stage companies, by providing investors with up to 30% of their investment back in income tax relief. Plus, investors can defer any capital gains tax on gains which are reinvested in EIS eligible shares, gains arising on the disposal of the shares may be exempt from capital gains tax, and loss relief is available if the disposal results in a loss.


To learn more about how SEIS or EIS works, please read the online HMRC guidance or contact your professional tax advisor.

These schemes provide great incentives for UK taxpayers who are either active investors or are just looking to support their friends and family in their entrepreneurial projects. Many Seedrs campaigns are looking to raise investment under one of these schemes and are identified as eligible with a small SEIS or EIS logo. Seedrs offers a simple and straightforward way to invest in a wide range of SEIS and EIS eligible companies and we take care of all the paperwork to help investors claim their reliefs.

Investing in startups involves risks, including loss of capitalilliquidity, lack of dividends and dilution, and it should be done only as part of a diversified portfolio. Seedrs is targeted solely at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions.

This page has been approved as a financial promotion of the Seedrs platform by Seedrs Limited, which is authorised and regulated by the Financial Conduct Authority. It is not intended to be a promotion of any individual investment opportunity, and the summary information provided about investment opportunities is intended solely to demonstrate the types of investments available through Seedrs. Any investment decision should be made solely on the basis of the full listing for that particular investment opportunity. Full listings are available to authorised investors only.