The coronavirus pandemic has brought the entire world to a standstill. It has caused a drastic decline in the economy for most countries, and the heads are preparing different schemes and programs to counter its ill-effect on their citizens’ betterment. The British government has decided to support businesses by commencing the Seed Enterprise Investment Scheme for investors. It is also abbreviated as the SEIS plan. Such a scheme provides different tax benefits to them when investing in early-stage or small businesses, startups and entrepreneurship. This plan was formulated to support and boost entrepreneurship startups in the country. Chancellor George Osborne introduced the SEIS scheme in his 2011 Autumn Statement. Let us check into some of the salient points of this scheme.
Salient features of the UK government’s SEIS scheme
The SEIS contains the following important features:-
- Every SEIS investor can invest in different companies. However, investors can invest up to £100,000 per taxable year.
- The company getting the SEIS investments can raise up to £150,000 from it. However, a single company will be able to accept multiple SEIS investments.
- Investors will not be able to exercise any power to control the company in which they are investing. They can hold a maximum of 30% from the total company’s stakes where they are investing.
- Regardless of the marginal rate, the investors can obtain a maximum of 50% tax relief if they make any investments.
- The company preferred by the SEIS investors has to be based in the UK. The owners have to be residents of the British Isles. This will make the company eligible to receive SEIS investments.
- Since the SEIS speak about small-scale or early-stage businesses, these companies can have a maximum of 25 employees. If the company comprises a chain of installations, the number pertains to the whole. The company also has to be a new one, and should not move into the third year of its functioning.
- The valuation of the company assets must not exceed £200,000.
- The company must conduct transactions in a sector approved by the scheme, preferably not in investment or finance. The company cannot deal with SEIS investments if it deals with properties.
- The SEIS aims to support entrepreneurship, and therefore, any person can apply.
Therefore, if you plan to make some money by starting entrepreneurship, you can look for some SEIS investors. You can start your business from your home. Look into all the necessary paperwork required to support your application for the SEIS scheme.