Autumn Statement - New "Seed Enterprise Investment Scheme" (SEIS)

Inevitably, the main focus of the Chancellor's Autumn Statement was the state of the UK's finances and the outlook for future growth.

The most interesting announcement from a tax perspective was the proposed relief for investments via a new "Seed Enterprise Investment Scheme" (SEIS) which is intended to give UK business a much needed jump-start.

Fine details of the new scheme are yet to be announced, but the headlines are:

• From the start of the next tax year, an individual will be able to invest up to £100k as seed capital in a "qualifying" company and generate a 50% rebate (regardless of whether or not the investor is a 50% taxpayer).
• For the 2012/13 tax year only, the individual investor will also enjoy an exemption from tax on capital gains of up to £100k invested in via the SEIS programme.
• From the company's perspective, the maximum fund raise under the SEIS plan will be £150,000.

In other welcome news, the Chancellor acknowledged the challenges that small businesses are facing in terms of raising finance. It was pleasing to see some helpful relaxations to the current Enterprise Investment Scheme (EIS) which may help the flow of “investor angel” funds to companies looking to expand. There was also the promise of simplifying and refocusing the existing EIS and Venture Capital Trust schemes which, again, augurs well for the future.

The SEIS proposals are in addition to the enhancements already announced in respect of EIS, as detailed in our earlier blog.

Please contact us for further details or to discuss the impact of the Autumn Statements with one of our advisors.