New SEIS limits – what could they mean for you?
Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.
The SEIS (Seed Enterprise Investment Scheme) was introduced by the government in 2012 to incentivise investment in start-ups. In return for backing the youngest – and hence riskiest – ambitious companies, investors can receive significant tax reliefs. To date, more than 10,000 companies have raised £1.5 billion under SEIS (2012/13-2020/21).
Now the government is going further. It wants “to provide a boost to start-ups and young companies by widening access to the SEIS and increasing the funding limits, encouraging additional investment and so further supporting the growth of these early-stage companies”.
The new SEIS limits became effective on 6 April 2023.
What are the new limits? What could they mean for you?
Here we give an overview. If you are unsure, please seek advice. Please remember: tax rules can change and benefits depend on circumstances.
Doubled allowance for investors: up to £200k per investor each tax year
From 6 April 2023, the maximum amount you can invest in SEIS – and claim tax relief on – has increased to £200k (previously £100k).
A doubled allowance also means the potential for doubled tax relief. If the full £200k is invested (after any initial charges are deducted), you could receive:
- Up to £100k (50%) in income tax relief
- Up to £28k or £20k (50%) capital gains reinvestment relief, depending on the type of gain
The other tax reliefs associated with SEIS remain unchanged: loss relief, tax-free growth and inheritance tax relief after two years. Read more on SEIS tax reliefs »
What about SEIS carry back?
SEIS investments offer a “carry back” facility: all or part of your SEIS investment in one tax year could be applied to the previous tax year’s income tax bill.
You can only do this if you have sufficient unused SEIS allowance in the tax year to which you’re carrying back, subject to the SEIS allowance at the time.
So, for instance, you could invest up to £200,000 this tax year, plus carry back up to £100,000 to the 2022/23 tax year.
More flexible rules for SEIS companies
As part of the same legislation, the government also introduced higher limits and more flexible qualifying rules for companies raising funds under SEIS. This means you could potentially invest in relatively more mature and better capitalised companies under SEIS: remember however these are still very high risk investments.
From 6 April 2023, companies can:
- Raise funds under SEIS within three years of trading (previously two years)
- Raise up to £250,000 under SEIS (previously £150,000)
- Have up to £350,000 in gross assets (previously £200,000) and still qualify for SEIS
Three featured SEIS funds targeting allotment this tax year
Haatch Ventures Seed Enterprise Investment Fund
The Haatch SEIS fund is managed by a team of entrepreneurs who have founded, grown, and sold businesses, achieving personal exits worth more than $150 million between them. The fund targets sectors in which the team has considerable experience: e‑commerce, retail technology, and digital marketing.
Startup Funding Club SEIS Fund
The fund is managed by SFC Capital (formerly Startup Funding Club), the most active Angel and Seed investor in the UK, and one of the most active in Europe. The fund invests in UK startups, alongside SFC Capital’s network of business angels.
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
Details of the latest SEIS offersRead more about SEIS