Businesses seeking investment through the Seed Enterprise Investment Scheme (SEIS) or Enterprise Investment Scheme (EIS) can benefit from obtaining advance assurance from HMRC before approaching investors.
Advance assurance allows a company to ask HMRC whether a proposed investment is likely to meet the conditions of a venture capital scheme. While it is not a guarantee that an investment will qualify, receiving assurance can provide potential investors with greater confidence that the company’s proposal is likely to be eligible.
To apply, a company must provide HMRC with details of the proposed investment, including its business plan, financial forecasts, latest accounts (if available), details of trading activities and how the funds will be used to support growth and development.
HMRC will also consider whether the company meets the relevant conditions, including the risk-to-capital requirement. Applicants may need to provide details of prospective investors or evidence of arrangements with fund managers, crowdfunding platforms or business promoters.
If advance assurance is granted, HMRC will issue a statement that the investment is likely to qualify. The company can provide this to potential investors as part of its fundraising process. However, the assurance only applies based on the information provided in the application, and any significant changes can affect its validity.
