The SEIS is designed to help small, early stage companies raise equity finance. The scheme has helped over 1,100 companies to raise the money they need to grow or expand according to the government.
Since launching in 2012 companies have raised £82 million funding through the scheme and it offers tax reliefs to individual investors buying shares in small companies at a very early start up stage.
For more information on the scheme, click here: https://www.gov.uk/government/news/government-incentives-help-1100-companies-lift-off
Seedrs is the UK’s most active equity crowdfunding platform for investing in startups and have announced some numbers in context with the SEIS:
Of the 47 businesses funded to date through Seedrs – amounting to a total investment of £2.3 million – 40 were eligible for the SEIS relief.
This amounts to a total SEIS-eligible investment of £1,762,229, made up of 3,417 different investments.
This total will produce SEIS income tax relief of £881,115 (50% of the amount invested) regardless of the income tax rate paid by the investor; they will all receive half of the money they invested back as income tax relief.
Many other startups funded on Seedrs have been eligible for SEIS’s sister relief ‘EIS’, amounting to potential additional relief of £147,601, taking the total relief earned through Seedrs investments through the two schemes to £1,028,716.
Jeff Lynn, co-founder and CEO of Seedrs said: “SEIS is proving transformative for small business finance. The first £150,000 that a business raises is often the most difficult: it’s too small for venture capitalists and too risky for banks, so the only option is private investors.
“At Seedrs, we have seen just how impactful SEIS can be. Of the 47 startups our investors have funded since we launched in July 2012, 40 have been able to provide SEIS relief. We know both from the data and from our regular conversations with our investors that that has made an important difference in persuading many investors to make their investments (or to invest more than they otherwise would have).”
Investors can invest up to £100,000 a year in SEIS qualifying companies and will in turn receive 50 per cent of their investment back as income tax relief. Investors using capital gains realised in 2013-14 and investing that gain in that same year or the following year will receive 50 per cent capital gains tax relief on the amount invested when investing in an SEIS qualifying company.