SEIS & EIS Advance Assurance: Boost Investor Confidence Before Fundraising

SEIS and EIS Advance Assurance: Helping Businesses Attract Investment

For growing businesses seeking external investment, investor confidence can make all the difference. If you're planning to raise funds through the Seed Enterprise Investment Scheme (SEIS) or the Enterprise Investment Scheme (EIS), obtaining Advance Assurance from HMRC can be an important step in strengthening your fundraising efforts.

Advance Assurance allows a company to ask HMRC whether a proposed investment is likely to meet the conditions of the relevant venture capital scheme before approaching investors. While it does not provide a formal guarantee, it can offer reassurance that the proposed investment is likely to qualify for the valuable tax reliefs available under SEIS or EIS.

Why Advance Assurance Matters

Many investors want greater certainty before committing funds. Having Advance Assurance in place can demonstrate that your business has already taken steps to confirm its eligibility, making investment opportunities more attractive and credible.

This can be particularly valuable for start-ups and early-stage businesses looking to secure funding for expansion, product development, recruitment or market growth.

What Information Does HMRC Require?

When applying for Advance Assurance, businesses will typically need to provide:

• A business plan
• Financial forecasts
• Latest accounts (where available)
• Details of current trading activities
• Information on how investment funds will be used
• Evidence supporting growth and development plans

HMRC will also assess whether the company meets the relevant qualifying conditions, including the risk-to-capital requirement, which is designed to ensure investments are made in businesses with genuine growth ambitions and commercial risk.

In some cases, businesses may also need to provide details of potential investors or evidence of discussions with fund managers, crowdfunding platforms or business promoters.

What Happens Next?

If HMRC is satisfied with the information provided, it will issue an Advance Assurance statement confirming that the proposed investment is likely to qualify for SEIS or EIS relief.

Businesses can then share this assurance with prospective investors during fundraising discussions. However, it's important to remember that the assurance is based on the information provided at the time of the application. Significant changes to the business, investment structure or intended use of funds could affect the outcome when a formal claim is made.

Planning Ahead Is Key

Obtaining Advance Assurance can help streamline the fundraising process and improve investor confidence, but preparing a robust application is essential. Ensuring that your business plans, forecasts and supporting documentation clearly demonstrate your growth strategy can improve the likelihood of a positive response from HMRC.

How Charlton Baker Can Help

Whether you're considering SEIS or EIS funding, preparing for investment, or reviewing your wider growth strategy, our experienced tax advisory and business advisory specialists can help you navigate the requirements and present your business in the strongest possible light. Call them now on 01380 723692 or email here.