What is SEIS Advance Assurance? | Accounts Lab

What is SEIS Advance Assurance?

We get asked about SEIS Advance Assurance a lot, so this blog hopefully answers some of your questions.

The Seed Enterprise Investment Scheme (SEIS) is a government-backed scheme that is designed to help new businesses raise equity finance. Tax efficient benefits are offered to investors for investing in small and early-stage start-up businesses in the UK. The aim of the SEIS is ‘to stimulate entrepreneurship and kick start the economy’.

SEIS investors can invest a maximum of £100,000 in a tax year which can be spread over more than one company. In return for their investment, the investor can then receive up to 50% tax relief in that tax year and providing shares are held for the qualifying 3-year period. There is also an exemption for any capital gains tax on an exit.

To qualify for SEIS, a company must be based in the UK, be no more than 2 years old, trade in an approved sector, have fewer than 25 employees and have assets of less than £200,000. A company can not raise more than £150,000 in total from SEIS investment.

Applying for SEIS Advance Assurance is the first step in raising funds under the Seed Enterprise Investment Scheme. SEIS Advance Assurance is an indication from HMRC that an investment in a company is SEIS compliant. Advance Assurance provides the opportunity to a company to provide HMRC with information on its intentions, its structure and activities, the proposed investment and how the money raised will be used. This can be shown to potential investors by the company to give them assurance that their investment should be eligible for tax reliefs.

To give Advance Assurance, HMRC will need to be satisfied that:

  • The company is a genuine growth company.
  • The company can be expected to be a qualifying company.
  • The shares to be issued will be eligible shares.
  • The shares are to be issued to raise money for a qualifying business activity.
  • The money raised is to be employed only by companies that satisfy the rules of the SEIS.

Applying for SEIS Advance Assurance is not mandatory but it undoubtedly makes any investment opportunity more attractive to potential investors.

SEIS Advance Assurance also helps the process of filing the SEIS1 form after any share issue. HMRC will be less likely to ask questions, as they already have a record of the company from the Advance Assurance application.

The SEIS1 form is known as the compliance statement and must be completed when the company has issued their shares, whether they applied for Advance Assurance or not. This is the first step in enabling the investors to make any claims to tax relief.

As part of the application for SEIS Advance Assurance, HMRC require the following information about the company to be supplied:

  • A copy of the latest available accounts.
  • The business plan, including financial forecasts.
  • Details of all trading or other activities to be carried out by the company and any subsidiary.
  • A schedule of all tax-advantaged investments received, including the amount, date and scheme under which each was received.
  • Details of the amount the company hopes to raise, and a schedule of the activities, and amounts, on which it intends to use the money.
  • An up-to-date copy of the Memorandum and Articles of Association and details of any changes to be made.
  • A copy of the register of members at the date of submission of the application.
  • Details of any subscription agreement or other side agreement to be entered into by the shareholders.
  • Confirmation that the company expects to be able to complete the declaration on the SEIS1 form in due course.
  • Details of the potential investors.
  • A copy of the latest draft of any prospectus, information memorandum, brochure or similar document relating to the relevant fund raising or offer to be issued to potential investors.
  • Any other relevant information such as group structure diagram.

Based on the above information, HMRC will provide an opinion (advance assurance!) as to whether it would be able to authorise the company to issue compliance certificates (SEIS3 forms) following receipt of a satisfactorily completed compliance statement (SEIS1 form) following an issue of shares.

As of January 2018, HMRC will not provide SEIS Advance Assurance on speculative applications.

HMRC will only accept Advance Assurance applications if the applicant names the individual(s), fund manager(s) or other promoter(s) who are expected to make the investment.

The company is not expected to have formalised offers of investment, but they are expected to have approached potential investors before making the application to determine the likelihood that they will attract investment.

You can apply for SEIS Advance Assurance if you are the company secretary, company director or you can authorise an agent to apply on your behalf.

The form to apply for SEIS Advance Assurance is the EIS-SEIS(AA) ; however this is quite restrictive.

At Accounts Lab, we submit a bespoke application and offer free SEIS advance assurance for all startups.



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