poniedziałek, 2 października 2017

How to SEIS?

The Seed Enterprise Investment Scheme (SEIS) is an innovative initiative by the British Government that helps connect start-ups to investors. We have recently successfully applied for it, and received our certificate in September 2017. Read more on this initiative.

The SEIS was launched by British Government on April 6, 2012 and, for the last five years, has helped thousands of entrepreneurs, both from Britain and overseas. To qualify, you must first register your start-up in Britain and your company must be in operation for no longer than two years.

The most important advantage of SEIS is that the Government returns up to half the invested money as tax relief. There is, however, a limit to the investment, at £150,000. In addition, only £100,000 in total can be invested in the first year.

Consequently, given that we have set our investment at £154,000, we have divided it into two stages: £70,000 to complete and launch the initial version of our product, Jaaz Portal, in the first year, and £84,000 in the second.

However, we have subsequently discovered that we can, in fact, seek considerably more investment than the stated £154,000. This is because sums over £150,000 will be covered not by SEIS but instead by the Enterprise Investment Scheme (EIS).

Advance Assurance

To be successful in convincing the investors, you not only need to correctly divide your investment deal, but it is also beneficial to receive confirmation from the government that your deal is SEIS certificated. This means you should apply for Advance Assurance – confirmation on paper that your company is approved for SEIS tax relief.

While there are numerous accountancy firms which can prepare applications for a sum of around £1000-2000, we decided that the process is not overly complex, and thus prepared the application ourselves.

This means we needed to prepare a number of documents, primarily, of course, the SEIS application that you can now make online. The beta version is available here: https://www.tax.service.gov.uk/investment-tax-relief

The online application is even simpler than the original SEIS Advance Assurance and can be completed in around 15 minutes.

Further documentation

The basic document required by authorities is the Memorandum and Articles of Association. The Certificate of Incorporation is no longer needed as the verification takes place online.

The other important document is the company Business Plan. It must be written according to SEIS requirements and will form the basis for the certification decision. Be careful to edit your Business Plan appropriately because, after approval, you cannot change it.

If you were trading before making the application, you will also need to present an accounting report, but this is not otherwise obligatory, and you can omit this step if you were not yet on the market at  the time of application.

The last item is a cover letter. While this is not mandatory, it can speed up the application process. You can find an example here: http://jaazportal.blogspot.com/2017/10/seis-cover-letter.html

If you have completed all the documents, you can apply for SEIS Advance Assurance online. The process usually takes around four weeks, and, if you have written a suitable cover letter, the authorities may not ask additional questions.

We applied in the beginning of August and received our certificates at the start of September 2017. We hope that this article will be of benefit, and wish you the best of luck in the process…

Read part II of the article here.

The SEIS Logo is courtesy of  seis.co.uk

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