How To Apply For SEIS Advance Assurance

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Jonathan is a specialist corporate and commercial solicitor who has over 11 years of experience at both large international City firms and smaller practices. For the last two years he has worked on a self-employed basis with a network of other freelance lawyers focused on entrepreneur-led businesses. If you'd like a competitive quote for any legal work please send an email to the address on the home page. You can also follow him on Twitter @jonathanlea

It’s not mandatory to apply to HMRC for advance assurance, but its commonly a pre-requisite in order to attract investors to subscribe for shares in your company.

Applying for advance assurance enables HMRC to confirm in writing that, on the basis of the information you’ve provided, your company share offer will qualify for the Seed Enterprise Investment Scheme (SEIS) relief. Receiving the advance assurance will also facilitate the next step of filing the SEIS1 form (see below) following the share issue as HMRC will be less likely to ask questions if they already have the company on record from the advance assurance stage.

Before giving an assurance, HMRC will need to be satisfied that the:

  • company is a qualifying company;
  • shares to be issued will be eligible shares;
  • shares will be issued to raise money for a qualifying business activity; and
  • the money raised is to be employed only by a company that satisfies the rules of the scheme.

Note that if after a SEIS round you want to raise further subscription monies that take advantage of the separate and additional EIS relief, then you can apply for both reliefs within a single advance assurance application.


If you have provided all relevant information and documents with your application in a correct and clear manner then it should take no longer than four weeks to hear back from HMRC with an assurance confirmation.


As part of an application you will need to submit the following documents and information:

  • a covering letter;
  • the SEIS advance assurance application form;
  • details of the amounts intended to be raised;
  • details of what these monies will be used for;
  • details of all trading or other activities to be carried on by the company and any subsidiary;
  • articles of association;
  • subscription and shareholders agreement (otherwise called an ‘investment agreement’) or other such similar documentation;
  • business plan (sometimes referred to as an information memorandum, or similar document such as a pitch deck);
  • recent accounts of the company (if any);
  • the company’s corporation tax reference number;
  • confirmation that no shares which qualified for EIS have previously been issued or that the company has not received any previous investment from a Venture Capital Trust; and
  • details of any ‘de minimis aid’ received (i.e. UK or EU state aid).

The corporation tax reference number is a 13 digit reference number printed on a letter you will have received from HMRC entitled ‘Corporation Tax Important Dates’ after you registered the company. Ensure that you do not give your VAT number or your personal UTR number by mistake.

The business plan should set out how the company and the share issue will comply with the SEIS requirements, such as the fact that ordinary shares (with no preferential rights) are being offered to investors and the subscription monies being raised are within the £150,000 SEIS limit. Also make sure these and other key points are highlighted in your covering letter to HMRC.

The subscription and shareholders agreement is usually the main contractual document signed by investors at the time their share subscription completes. It may also be accompanied by bespoke articles of association (as opposed to the standard ones the company was incorporated with). Such documents will be subject to negotiation with investors, but you can submit preliminary draft versions to HMRC as part of your advance assurance application.

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Covering letter

It is a good idea to write a detailed and clear covering letter that should have the effect of clarifying any ambiguous points for HMRC and confirming the main ways that your company and the share offer meet their requirements. Such an approach should ensure that you receive the assurance from HMRC first-time rather than getting a letter back from them asking for further clarification.

An example of where you need to add clarity in the covering letter will be the situation where a software company will be generating revenues from licence fee income (as most will). You will be relying on a carve-out from an otherwise non-qualifying ‘excluded activity’ – in receiving royalty or licence fee income – which states that you can qualify as a SEIS / EIS company if the whole, or greater part, of the underlying intellectual property that generates the revenues is created by your company.

Don’t hide any critical information which you think might be dubious as if you do this then your advance assurance will be worthless if HMRC subsequently finds out about something that will invalidate the relief after the shares are issued. If so they can withdraw the tax relief to your investors, and possibly fine you if you were aware of the issue but didn’t let them know.

Formal company approval following an issue of shares

Once you have received the advance assurance from HMRC and issued the shares to investors then before investors can claim any tax relief the company must complete form SEIS1 and send it to the Small Companies Enterprise Centre (SCEC). The company can’t submit an SEIS1 form until either it’s been trading for four months or if not yet trading that it’s spent at least 70% of the money raised following the advance assurance and issue of relevant shares.

If on the basis of the information supplied in the SEIS1 form the SCEC accepts that the company meets the scheme’s criteria it will send the company a certificate confirming this along with SEIS3 claim forms for the company to send to each of the investors so they can individually claim the tax reliefs they are entitled to.


We can help companies raising investment pursuant to SEIS in the following ways:

  • advising on the qualifying criteria to be met and how to deal with any unusual factors;
  • checking and advising on the proposed share allocations and share capital;
  • reviewing and advising on marketing documentation such as executive summaries, business plans, information memorandums and pitch decks to ensure you attract and don’t repel investors;
  • advising on, drafting and/or reviewing the legal transactional documentation to be used, including articles of association, shareholders agreement, subscription and shareholders agreement (known as an ‘investment agreement’), subscription agreement, deed of adherence, variation and waiver deed, offer letter and any heads of terms;
  • completing the SEIS (AA) advance assurance application form;
  • drafting a suitably detailed and clear covering letter to accompany the application form;
  • assisting founders complete the investment round and issue of shares correctly;
  • producing relevant shareholder resolutions and board minutes in respect of the investment round;
  • completing and filing the statement of capital form at Companies House and creating share certificates; and
  • applying for tax certificates from HMRC (Forms SEIS1) in order that the investors can claim their tax reliefs.

We offer a free initial 20 minute consultation about your proposed fundraising, while we produce and submit SEIS (and/or EIS) advance assurance applications on your behalf for a fixed fee of £500 inc. VAT.

What are the main SEIS (and EIS) tax reliefs?

Note that once a company has carried out an intial SEIS compliant round, the company can raise subsequent rounds (up to £12 million for most companies) pursuant to the EIS tax reliefs available for individual investors.

SEIS Reliefs

  • Income Tax Relief of 50% of the amount invested in SEIS qualifying shares can be offset against personal income tax liabilities up to £100,000 in the tax year that the qualifying shares are acquired (or for the tax year preceding that in which the SEIS investment is made, save to the extent Income Tax Relief has already been claimed for the preceding year).
  • Capital gains tax exemption of up to 50% will be offered in respect of gains realised on the disposal of assets that are invested in SEIS Qualifying Shares in the same tax year.
  • Investors can elect under the carry-back rules to treat part or all of their investment as if made during the 2014/15 tax year and therefore, may benefit from capital gains reinvestment relief to the extent that they have realised a chargeable gain in the 2014/15 tax year.
  • SEIS investments are expected to be 100% inheritance tax exempt after they are held for two years.
  • Investors are exempt from paying any capital gains tax from the sale of their SEIS Qualifying Shares.
  • Losses (net of income tax relief already obtained) on SEIS investments can be offset against income or capital gains in the tax year in which the disposal occurs, or in the previous year, or both.

EIS reliefs

  • Income tax relief of 30% of the amount invested in EIS qualifying shares can be offset against personal income tax liabilities up to £1 million in the tax year that the qualifying shares are acquired (or for the tax year preceding that in which the EIS investment is made, save to the extent Income tax relief has already been claimed for the preceding year).
  • Investors facing capital gains tax liabilities on other investments can use their EIS investment to defer the capital gains (for all capital gains up to three years prior to, and one year after, the investment is made) . Tax won’t be due for as long as their EIS investment is held and the capital gain will be eliminated if the EIS qualifying shares are held at death.
  • EIS investments are expected to be 100% inheritance tax exempt after they are held for two years.
  • Investors are exempt from paying any capital gains tax from the sale of their EIS qualifying shares, provided the shares have been held for at least 3 years.
  • Losses (net of income tax relief already obtained) on EIS investments can be offset against income in the tax year in which the disposal occurs, or in the previous year, or both.  Alternatively, the loss can be set off against capital gains in the year of disposal.

Free initial call

For all new potential clients and matters we hold a no cost and no obligation initial 20 minute call to discuss your requirements and agree in principle different ways we can help you. We try to hold these calls at either 8:30 am or 9 am most mornings (and sometimes at midday) so as not to interfere with the demands of existing clients and work. This also tends to be a convenient time to speak to most people. After this call we can then email you a scope of work, fees quote and confirmation of any other points or information mentioned on the call.

Further reading

Angel Investment Term Sheet

Startup Investors Forum

How To Issue New Shares In A UK Company

Venture Capital and SEIS and EIS Angel Equity Investment Legal Terms

SEIS Slideshare Presentation (particularly the worked examples on pages 7, 8 and 9)

Can my company still qualify for SEIS if I receive grant funding?

For SEIS and EIS can a qualifying subsidiary be in another jurisdiction?

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