This is a refresher to our earlier blog called SEIS/EIS Loss Relief: Do I lost all of my investment if the company fails.  In the case of a SEIS/EIS qualifying company failure, UK investors can apply for loss relief for their SEIS / EIS investments, which is one of the features that attracts private investment into start ups and early stage companies in the UK.  Investors can indeed claim loss relief on a failed Seed Enterprise Investment Scheme or an Enterprise Investment Scheme investment in the UK by following these steps:

1. Confirm the Qualification: Ensure that the SEIS/EIS investment qualifies for loss relief. To be eligible, the investment must have been made in a qualifying SEIS/EIS company, and the shares must have been held for at least three years.  These companies are usually small and privately held, as discussed in our prior blogs.  The investor must have held on to the shares in such companies for at least three years from the date of issue.

2. Calculate the Loss: Determine the amount of the loss incurred on the SEIS/EIS investment. This is typically the difference between the amount invested and the amount recovered from the failed investment.  Please note that you can only claim loss relief only upon disposing the shares, either by sale or ceasing to own them (in the case of a liquidation).

3. Notify HMRC: You must report the loss to HMRC (Her Majesty's Revenue and Customs). This is usually done through your annual self-assessment tax return for either the year in which the disposal occurred or you may be able to carry it back to the prior year (in some cases).

4. Claim Income Tax Relief: SEIS/EIS investors are eligible for income tax relief on their investment, and this includes relief on losses. To claim this relief, you can offset the loss against your income for the year in which the investment failed. You may also be able to carry the loss back to the previous tax year to get a refund on previously paid income tax.

5. Complete Form EIS3: If you haven't already received a Form EIS3 for the investment, you may need to contact the company in which you invested to obtain one. This form provides the necessary details for claiming tax relief.

6. File a Self-Assessment Tax Return: Include the details of the loss and the relevant tax relief claimed in your self-assessment tax return. Ensure that all required documentation, including Form EIS3, is attached.

7. Wait for Approval: After submitting your tax return, HMRC will review your claim. If everything is in order, they will process the loss relief.

8. Receive Tax Refund: If your claim is approved, you will receive a refund for the income tax you paid on the amount of the failed investment. This can help offset the financial loss.

Please consult with your tax advisor to ensure you follow the correct procedures as tax laws may change over time.