The MoneyLab Blog

SEIS / EIS UK permanent establishment condition

Posted by Johnathan Graham on 11-Nov-2019 10:18:21

Seed Enterprise Investment Schemes (“SEIS”) and Enterprise Investment Schemes (“EIS”) allow qualifying companies to raise much-needed capital by offering investors tax reliefs. The tax reliefs are available to UK taxpayers only; however, companies incorporated outside of the UK can raise money through the schemes.

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Topics: EIS, SEIS

Five things you need to know about setting up UK branches

Posted by Johnathan Graham on 07-Oct-2019 14:43:28


When applying for SEIS and/or EIS advance assurance, a company is required to have a Customer Reference Number (CRN number) and Unique Tax Reference (UTR number). A UK company will have both numbers issued automatically upon incorporation. A company incorporated outside of the UK (foreign company or overseas company) must open a UK branch to obtain both numbers. A branch is a permanent establishment in the UK; it is an extension of the parent company and is required when the company has a presence in the UK.

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Topics: EIS, SEIS

Raising money through EIS as a Knowledge Intensive Company

Posted by Johnathan Graham on 01-Aug-2019 13:37:36


Enterprise Investment Schemes (EIS) allow high-risk start-up companies raise much-needed capital to in order to grow. EIS offers tax reliefs to investors which reduces their risk.

The scheme has various conditions a company must meet to qualify. The conditions include time frames from the first commercial sale, max employee numbers, qualifying trades and maximum raise amounts. For more information on EIS and the qualifying conditions, view our eBook.

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Topics: EIS, SEIS

SEIS/EIS exit considerations

Posted by Vasiliki Carson, Sapphire Capital on 15-May-2019 09:58:23

In discussions with clients, I make it a point to stress the primary purpose of the Enterprise Investment Schemes which is to promote the growth and development of UK business and innovation.  SEIS/EIS finance is "patient capital" as investors do not seek to realise a return quickly.  When an investment is made, there is no expectation of imminent exit, and thus the primary reason for making the placement is not to strike a tremendous sales price; instead, it is to see whether the company can set up and start profitable trading. The SEIS/EIS rules as set out in the Income Tax Act specifically state that pre-arranged exits are not allowed.  It is no wonder that business angels are big adopters of the schemes, as they provide valuable mentorship in addition to financing to companies in their development phase.

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Topics: SEIS

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

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 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

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 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

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

Issuing SEIS and EIS shares - 4 key considerations

Posted by Vasiliki Carson, Sapphire Capital on 31-Aug-2017 15:43:53

So, you successfully obtained SEIS and EIS advance assurance from HMRC and successfully raised your “risk finance” capital. Congratulations are in order, as achieving all of this is a lot of hard work! Before you pop open the champagne, however, you must ensure that you correctly issue the SEIS and EIS shares, as errors in share issuance can put all your hard work in jeopardy. (Grab a cup of coffee instead and read on, as there is still more work to do...)

Share issuances cannot easily be amended once filed and may result in your investors not being able to avail of the Enterprise Investment Schemes. If investors aren’t able to avail of the SEIS / EIS tax incentives, you may end up losing the finance promised to you.

Here are some guidelines to keep in mind when you are about to issue SEIS and EIS shares:


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Topics: SEIS

What is a SEIS qualifying company?

Posted by Boyd Carson, Sapphire Capital on 03-Mar-2017 18:36:06


We are often asked which companies qualify for SEIS. Below is a brief summary of the requirements.

Each Company must initially (i.e. at the time of issue of the shares) not be listed on a recognised stock exchange (as defined for the purposes of SEIS Relief) and there must be no “arrangements” in place for it to become so listed. In addition, throughout the three year SEIS period, it must not be a subsidiary of, or be controlled by, another company. It must either exist to carry on a qualifying trade or else be the parent company of a trading group and there must be no “arrangements” in existence for the Company to become a subsidiary of, or be controlled by, another company.

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Topics: SEIS

Autumn Statement 2016 Implications for SEIS, EIS, and SITR

Posted by Vasiliki Carson, Sapphire Capital on 24-Nov-2016 11:33:42

We were eagerly awaiting to hear the 2016 Autumn Statement in order gain some insight as to how the government proposes to deal with the resulting market uncertainty created by the Brexit referendum, and what the new prime minister and her cabinet are seeking to achieve.

The main take-away points were:

  1. Productivity of the UK workforce is a main focus for improvement, and the government plans to do this by creating a £23 billion Productivity Investment Fund to promote innovation and infrastructure; the money is to be used primarily for housing, transport, telecoms and R&D projects. This funding will flow through the British Business Bank in order to improve prosperity and commerce in regions outside London, and in particular for the North of England.
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SEIS / EIS advance assurance for foreign companies - is it really possible?

Posted by Boyd Carson, Sapphire Capital on 14-Jun-2016 15:24:19


Short answer: yes it is. At Sapphire we are increasingly being asked to obtain SEIS and or EIS advance assurance for foreign-based companies. Contrary to popular belief, this is a popular structure. We recently obtained SEIS and EIS advance assurance for a company based in Malta (link to example), EIS advance assurance for a company in the United States (link to example) as well as one based in the Netherlands (link to example).

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Topics: EIS, SEIS

Structuring SEIS, EIS and SITR funds - current issues

Posted by Nick Rutter, Maclay Murray & Spens LLP on 13-Apr-2016 16:47:36

As the latest wave of EIS and SEIS offers subsides, and we enter the new tax year, we look back at some of the issues we have come across while advising our clients on setting up investment structures in this space:

Stand-alone or fund?

Economies of scale will often mean that a fund is a cost-effective approach where a stand-alone offer for a single corporate would not be, particularly in the SEIS space.  However, given that the maximum raise under EIS is now £5,000,000, there can be times when a single company EIS offering makes sense – particularly given AIFMD issues.

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Can a founder claim EIS or SEIS relief?

Posted by Violet Spence, Sapphire Capital on 30-Mar-2016 12:25:14

At Sapphire Capital Partners we meet many entrepreneurs who have great business vision and are keen to pursue their ideas through one of the business tax incentive schemes; Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS), or Social Investment Tax Relief (SITR).

One of the areas where we are frequently asked for advice and guidance is in the area of founder shares, and more precisely, can the entrepreneur or owner of the company benefit from the above mentioned tax schemes?

And the answer to this is that it all depends on your relationship with the company, with the key question being, “Are you connected with the company?”

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Topics: EIS, SEIS

Why SEIS / EIS Inheritance Tax Relief should matter to you now

Posted by Vasiliki Carson, Sapphire Capital on 26-Jan-2016 11:06:13


You may have seen my video blog on Sapphire’s website where I give a high level overview on the incentives offered by the Enterprise Investment Scheme (“EIS”) and the Seed Enterprise Investment Scheme (“SEIS”).  I now want to delve into a little bit more detail on their Inheritance Tax Relief (“IHT”) incentive as David Bowie’s carefully orchestrated departure from our world got me thinking a little more about the importance of planning for the end. Because we all know that death and taxes are unavoidable, the relief offered by the schemes on estates makes investing in these products relevant to a much wider population than what you might have originally thought. 

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Topics: EIS, SEIS, EIS tax reliefs

SEIS and EIS - what trades are excluded?

Posted by Violet Spence, Sapphire Capital on 14-Dec-2015 14:08:00

The Enterprise Investment Scheme (EIS), and Seed Enterprise Investment Scheme (SEIS) offer very attractive benefits to investors. Investors can only claim tax relief if the company meets certain conditions, one of these being the type of business which it operates.  

We are often asked for our advice on whether a business will qualify for these tax reliefs and with our wide experience in this area we can offer our view based on our past clients and dealings with HMRC. The rules laid down by HMRC give an overview but not all businesses fit neatly into them, and there will always be grey areas.

Most trades qualify but there are a number of excluded activities in each of these schemes. It is important to remember that activities are only excluded if a substantial element of the company’s trade consists of the ‘excluded’ activity. There is no formal definition of ‘substantial’, but a general rule is no more than 20% of the trade. This 20% benchmark applies to the company as a whole, so the parent company may well qualify for SEIS or EIS status whilst a subsidiary may not.

So let’s look at what the rules currently dictate for trades excluded from EIS and SEIS: 

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Topics: EIS, SEIS

EIS, SEIS & SITR - the 2015 Autumn Statement changes

Posted by Violet Spence, Sapphire Capital on 27-Nov-2015 08:46:41

There are many of us who had hoped that the Autumn Statement would bring an announcement on the widening of the SITR scheme and would herald an increased investment limit and an expansion of the activities permitted under this scheme. Unfortunately this was not the case, with only one change relevant to the venture capital schemes being announced.

But it was not a change that we were expecting! 

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EIS, SEIS & SITR, what can go wrong?

Posted by Violet Spence, Sapphire Capital on 23-Sep-2015 09:04:12

Why invest in an Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), or Social Investment Tax Relief (SITR) company?

Well along with the desire to see the start-up company succeed there is also the attraction of the healthy tax reliefs offered by such investments /blog/tax-schemes_comparison

But what should you watch out for?

We recently met with HMRC and they outlined the common pitfalls which are encountered for EIS and SEIS and SITR companies and investors.

Believe it or not, one of the reasons why companies fail to maintain their tax status is shares not being fully paid up on issue. We look at this requirement along with other failings noted by HMRC.

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SEIS tax relief - the six main tax reliefs explained.

Posted by Boyd Carson, Sapphire Capital on 21-Aug-2015 13:53:06

Every day at Sapphire Capital we talk with numerous entrepreneurs who are setting up companies and one of the most common questions they have is what are the Seed Enterprise Investment Scheme ("SEIS") tax reliefs and can their new enterprise obtain them for potential investors? This is a great question and an important one for any entrepreneur who is seeking to raise finance for their company.

Although at Sapphire we specialise in SEIS, EIS and SITR, that does not mean that we always recommend that obtaining SEIS (or EIS) advance assurance is the right thing to do.

This blog article will seek to (1) explain the six main tax reliefs, (2) give directions as to how a company can obtain these reliefs for itheir investors as well as (3) assisting business owners in deciding whether obtaining SEIS advance assurance is right thing to pursue.

The six main tax reliefs are as follows:

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Topics: SEIS

10 reasons why your low budget film production will never get financed

Posted by Phil Taylor, Film Engine Limited, London on 11-Dec-2013 13:21:00

Out there in our wonderful but often difficult world there are millions of would-be filmmakers, some with just great ideas, others with the capacity to write a script and perhaps as you’re reading this you are, or know, one of them. But for every 100,000 scripts only a tiny percentage ever get made. Why is that? Hopefully my experience and feedback will help show you why with some simple and common sense tips. 

Problem One: “I’ve written a blockbuster!”

You think your script is the best thing since ‘sliced bread’ and cannot understand why hardly anyone else thinks like you do.  Solution - get a top professional to review your script and seek plenty of input from your peers. Find another writer who has had their film financed and ask them to review it. Try to use someone with a similar genre outlook.  Get as many reviews as you can.

Problem Two: Genre “It’s a horror, Sci fi with a romantic twist set on a desert island which is invaded by pirates and comical CGI dinosaurs set in ancient China with kick boxing elephants….”

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Topics: EIS, SEIS, Film SEIS, Film