The MoneyLab Blog

5 requirements companies must meet for SEIS/EIS

Posted by Johnathan Graham on 28-Feb-2019 21:43:19


The Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) are very effective ways for start-up companies to attract private investment through the offering of tax incentives to investors.

There are conditions a company must meet to qualify for the schemes, some of which are well known to both entrepreneurs and investors. For example, the age requirement condition requires a SEIS company to be trading for less than two years; for EIS, the company cannot be trading for longer than seven years.

However, from my experience working with many companies seeking SEIS/EIS, there are some fundamental conditions that are equally important but not as well known.  Here are the ones that I see many entrepreneurs unaware of, which has led to problems with availing of the schemes:

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Topics: EIS, SEIS

How SEIS/EIS companies should be preparing for Brexit

Posted by Vasiliki Carson, Sapphire Capital on 18-Jan-2019 17:06:49

 

With this week's news of the EU Withdrawal Agreement failing to secure support in Parliament, the UK faces more uncertainty. Uncertainty is no friend of economic growth. It is a fact that one of the foundations for economic growth is stability in the rule of law. Many investors, and particularly SEIS / EIS investors, view political/economic instability as a deterrent to making investments, because SEIS / EIS investing is inherently risky, even in the best of times. Moreover, reduced levels of investment ultimately negatively impact future economic growth.

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Topics: Brexit

Changes to the SEIS/EIS advance assurance process

Posted by Vasiliki Carson, Sapphire Capital on 14-Jan-2019 09:47:51

 

The advance assurance process for SEIS and EIS has changed! New online forms for SEIS, EIS and VCT are now available and are required to be used for any applications being submitted from the 1st of November 2018 onwards. Compliance statements SEIS1, EIS1 and SITR1, were also amended, although these forms were previously available online.

The new forms can easily be accessed on the gov.uk website, although you must be careful you select the correct one as there are a number of different versions that may confuse.

In addition to this new online form, HMRC now specifically requests applicants provide the below-listed documents:

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Topics: EIS, SEIS

Outlook for 2019

Posted by Boyd Carson, Sapphire Capital on 07-Jan-2019 21:27:26


[This article was originally published in the IFA Magazine in December 2018 and has been republished with IFA magazines permission - https://www.ifamagazine.com/article/do-you-hear-what-i-hear/]

 

At Sapphire, we do two things: We assist entrepreneurs in making SEIS/EIS advance assurance applications to HMRC, and we manage investment funds. The two areas fit hand in glove. The advance assurance work, which also includes assistance with investor readiness, provides us with a never-ending pipeline of potential companies for our investment funds, but it also provides us with a unique insight as to which sectors entrepreneurs think will be the opportunities of the future. We work directly with these entrepreneurs, and we are aware of definite trends. As a result, there are three areas of growth that I see for 2019.

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Topics: Technology

11 questions to ask before selecting an EIS custodian & administrator

Posted by Paul Richardson, The Share Centre Limited on 04-Dec-2018 09:41:51


The selection of an EIS Custodian for your fund(s) can be a very confusing and time consuming business and this difficulty has increased with the increased regulatory requirements of Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation & The Markets in Financial Instruments Directive (MIFID II).  

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Topics: fund management

Sapphire Capital Partners LLP signed the Women in Finance Charter

Posted by Vasiliki Carson, Sapphire Capital on 19-Nov-2018 16:56:27

I am excited to announce that we have signed the Women in Finance Charter, which is a formal pledge of Sapphire Capital Partners LLP's support to improve gender diversity in the financial sector, and to enable business women's talent to be optimised for the greater good of businesses and the economy.

As stated on the UK government's website, "too few women in finance get to the top."  Although I am very happy to see such a public and impactful acknowledgement, I believe that even this factual assertion is an understatement.  Women face such significant barriers and challenges to career progression that even staying in employment within the finance sector proves difficult, and that is not even entertaining the idea or hope of rising to the top and maintaining their position there.

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Topics: Women in Finance

Autumn Statement 2018 - SEIS and EIS considerations

Posted by Vasiliki Carson, Sapphire Capital on 12-Nov-2018 09:37:17

 

This blog could be the last ever to be written about the 2018 Autumn Statement.  I apologise for the delay.  My excuse is that it wasn't very exciting from an Enterprise Investment Scheme ("EIS") perspective because there were no further changes to the rules, but rather a series of progress reports.  The boring nature of this Budget is an excellent thing as companies and advisers are still trying to grasp the recent changes effected in mid-March 2018. 

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Topics: Autumn Statement

Growth Investor Awards 2018 Press Release - Sapphire Capital Partners announced as "One To Watch" in the Best SEIS Investment Manager award

Posted by Vasiliki Carson, Sapphire Capital on 09-Nov-2018 10:38:04


Below is Intelligent Partnership's press release from this year's Growth Investor Awards which took place earlier this week:

Sapphire Capital Partners announced one to watch in Best SEIS Investment Manager award

  • Roger Blears, Senior Partner at RW Blears, announced Sapphire Capital Partners as the one to watch in the 2018 Best SEIS Investment Manager award sponsored by RW Blears Solicitors
  • Five impressive finalists went head-to-head competing for the prestigious title
  • Visit growthinvestorawards.com for details of winners and runners-up in all 15 categories
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Topics: Sapphire Capital team

We are hiring! Belfast based fund compliance associate wanted!

Posted by Vasiliki Carson, Sapphire Capital on 10-Oct-2018 09:24:39

Sapphire Capital Partners LLP is a Financial Conduct Authority (“FCA”) authorised, multi-award winning firm.  We aim to supply a highly professional, efficient and personal service to our clients (primarily Seed EIS and EIS companies and investment funds) and to nurture long-term mutually beneficial relationships with clients and associated advisers. 

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Topics: Sapphire Capital team

Registering a UK branch with the Companies House - 10 key areas

Posted by Johnathan Graham on 08-Oct-2018 13:56:30

 

For a foreign company to qualify for SEIS and/or EIS they must meet at least one of two additional requirements. They must either: 1) Have a' permanent UK establishment which means an element of work is carried out in a fixed place of business. 2) Have a UK representative that can enter into contracts on behalf of the company (for more information read my prior blog: “Can a foreign (non-UK) company obtain SEIS and EIS monies”).

As stated on the Gov.uk website "you must register (with the Companies House) if you set up a place of business in the UK or if you usually carry out business from somewhere in the UK". 

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Topics: EIS, SEIS, foreign company, OS IN01

Structuring your pitch deck - how to get it right?

Posted by Michael McDowell, Sapphire Capital on 10-Sep-2018 13:01:01


The first contact many investors will have with your business is an introductory email with a pitch deck. However, too often a pitch deck is just:

  • a high-level business description;
  • a long exploration of an industry sector;
  • unsubstantiated financials; and
  • a biography of the founder.
I often hear entrepreneurs say that the branding and production quality of the pitch deck doesn’t matter. I don’t agree with this. Pitch quality counts as it infers how well you can promote both the company and the product. It’s true however that some investors will look beyond branding and production quality, but in my experience it’s a risk not worth taking. 
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Topics: Crowdfunding

You are invited to the 2018 EISA "Ready, Steady, Grow" Belfast event!

Posted by Vasiliki Carson, Sapphire Capital on 31-Aug-2018 13:53:36


Once again we are excited to be hosting the 2018 EIS Association's  "Ready, Steady, Grow" Belfast event.

We invite you to join us on the 25th of September at 4pm at the Ormeau Baths, 18 Ormeau Avenue, Belfast.  You can register for this event by clicking here

Here are three reasons why you should consider attending:

  1. An impressive line-up of speakers from Northern Ireland and beyond talking about their experience and perspective on EIS.
  2. A great free networking opportunity.
  3. An open forum where you can get questions about EIS and finance raising answered by experts.

 

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Topics: EISA

SEIS/EIS for film - is it still possible?

Posted by Vasiliki Carson, Sapphire Capital on 21-Aug-2018 12:47:15


It is five months since the latest SEIS/EIS rules were enacted (see our prior blog “Autumn Statement 2017 – SEIS and EIS implications”), and we are now starting to understand the effect, particularly within the film and TV sector which appears to be significantly impacted.

 

The complexity related to EIS and film companies results from the new “Risk to Capital” condition enacted on the 15th of March 2018.  This condition, which gives more discretionary powers to HMRC was introduced to ensure the schemes support early-stage companies with the potential to grow in the long term. The change was required as certain companies used the schemes to create tax motivated, low-risk investment opportunities, referred to as “capital preservation investments” (e.g., using EIS monies to buy property from which the company traded).

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Topics: Film SEIS, Film, HMRC advance assurance, 2017 Autumn Statement

Can a foreign (non-UK) company obtain SEIS and EIS monies?

Posted by Johnathan Graham on 07-Jun-2018 16:07:53

 

If you are a foreign company looking to expand into the UK, the good news is that you can avail of the SEIS and EIS schemes, thereby benefiting not only from increasing market reach, but also by being able to tap into UK private investment (via the SEIS and EIS schemes). All monies raised are received directly into the foreign company's bank account, allowing the foreign company to directly use the capital.

The SEIS and EIS incentives allow qualifying companies to raise capital, which is critical to expanding into new territories. The SEIS/EIS schemes enable investors to claim back income tax reliefs (50% for SEIS and 30% for EIS), avail of Capital Gains Tax reliefs and/or deferrals and apply for loss relief if it all goes wrong.

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SEIS/EIS Loss relief: Do I lose all my investment if the company fails?

Posted by Johnathan Graham on 24-May-2018 10:36:10

 

Everyone works hard for their money, and as a result investing is a daunting experience due to the risk of loss.  Fortunately, an investment in Enterprise Investment Scheme “EIS” and Seed Enterprise Investment Scheme “SEIS” companies offer loss relief.  This incentive enables an investor to offset losses obtained against either their Income Tax or Capital Gains Tax “CGT” amount.

SEIS/EIS  were set up by the government to enable small startup companies to attract their first round (and riskiest) of capital.  With EIS, a company can raise up to £12 million and with SEIS the company can raise £150,000.

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Five points every startup should be aware of to be GDPR compliant

Posted by Johnathan Graham on 18-May-2018 12:37:05

 

The dark cloud of the General Data Protection Regulation, better known as GDPR is about to descend upon us. Have you got your umbrella of security and raincoat of compliance at the ready? Are you prepared for the hailstones of data protection? Hiding away by taking shelter unfortunately is not an option; but never fear, Johnathan is here with a summary checklist of what needs to be done by the 25th of May.

GDPR is coming into effect, replacing the Data Protection Act 1998.

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Irish cross border trade considerations for Brexit & beyond

Posted by Vasiliki Carson, Sapphire Capital on 15-May-2018 15:03:43


The stickiest point in the Brexit considerations is, arguably, the question of the Irish border, being the UK’s only land border. As a result, there is uncertainty and ensuing anxiety for entrepreneurs and early-stage companies both North and South of the border, that are trying to figure out how to best prepare themselves.

Here is how I see what Irish entrepreneurs need to think about in order to  prepare for Brexit and the ensuing implications for cross border trade between the South and the North of Ireland:

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Topics: EIS Schemes

Four key changes to SEIS & EIS you now need to be aware of

Posted by Vasiliki Carson, Sapphire Capital on 26-Mar-2018 16:03:51


 

The EIS changes initially announced in the 2017 Autumn Statement have now passed into law with the granting of Royal Assent on the 15th of March 2018. Here are the four main changes that you need to be aware of currently:

1) Advance assurance applications must include the names and addresses of potential investors. This change was made to reduce the number of applications that HMRC receives, to reduce the volume of requests to better concentrate efforts on propositions that have a higher likelihood of raising capital. HMRC guidelines require for applicants to provide the names and addresses of six interested investors (of course if you are raising a small amount, six names may not be necessary). For more information on this change, please see our prior blog called "The chicken or the egg? New HMRC requirements to stop speculative SEIS/EIS advance assurance applications".

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Topics: EIS Schemes

Five things you need to prepare for raising money

Posted by Boyd Carson, Sapphire Capital on 09-Mar-2018 10:23:10

 

In my experience, raising money for a business is difficult, time-consuming and stressful. As an entrepreneur, you will be torn between keeping your business going and spending considerable amounts of time trying to raise finance. The reality is that raising finance always takes longer than you think (and have budgeted for). Before you approach any potential investors (and that also includes friends and family), you need to make sure you are sufficiently prepared both regarding presentational materials as well as how you have prepared yourself (i.e., you need to be crystal clear on the business idea and know the key numbers etc.).

To help you on your way, here is a list of the five key areas we recommend you have prepared beforehand:

1) Write a well thought out business plan.

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Topics: EIS, SEIS, Business Plans

The chicken or the egg? New HMRC requirements to stop speculative SEIS/EIS advance assurance applications

Posted by Boyd Carson, Sapphire Capital on 27-Feb-2018 12:51:15

 
You know the saying about "which came first: the chicken or the egg?" Well, which came first: the investor or the tax relief?  From January 2018, HMRC have stated that investors should be identified before they will consider the potential tax reliefs. Having worked with numerous companies over the years to obtain the SEIS/EIS tax reliefs, I am not so sure. It is often the fact that the company has obtained the SEIS/EIS advance assurance (i.e., the potential tax reliefs) that will attract the investors to invest in the first place. But it is what it is and we have to work with HMRC to ensure we comply with the new regulations. 

1) The Issue:

From the 2nd January 2018, HMRC is not accepting SEIS and/or EIS advance assurance applications which they consider to be "speculative" i.e., the company which is applying for SEIS/EIS advance assurance does not yet have any individuals (or investment fund) who want to invest in the company.

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Topics: EIS