The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) advance assurance are a way for companies to find out their investors’ eligibility for tax relief from HM Revenue and Customs (HMRC). It is a way to gain assurance in advance before investing in the company. This is because the full eligibility cannot be guaranteed before the investment has been finalised. Advance assurance works as a guarantee from HRMC that the tax relief will be provided once the investment has been made—if the rest of the information on file is accurate and does not contain any falsehoods. If you are thinking of securing advance assurance, here are some questions you might want answered:
Why should a company apply for EIS advance assurance?
Advance assurance is in place to ensure that an investment, once it has been made, will qualify for the HMRC tax relief scheme. A company should be able to present this advance assurance to venture capitalists and investors when seeking out an investment from them. They are more likely to invest if they have this assurance, which holds true if all the other conditions have been met.
How can one apply for EIS advance assurance?
To apply for EIS advance assurance, you have to represent the company, either as a director or as a secretary. Your company can also hire a consultant or a tax expert to file it for you. The main requirements for the application are detailed information regarding the business project and plans. You should be able to provide details of how much financial capital you are likely to raise, along with showing a detailed plan for how this capital is going to be utilised and the types of trading activities that your company is going to participate in.
You should include a full financial breakdown of where and how the money is going to be spent. You will need to provide your company’s financial details, including bank accounts. This information should be provided for your company and all other subsidiary companies that are going to use the same venture capital or investments. If you have previously applied for any of the government’s other venture capital schemes, then you should provide the details pertaining to these, as well as a detailed description of any changes that you might be making from the previous applications. You should also provide attestations by your directors along with other supporting documents that prove your case. All of this can be done online, and can also be mailed by post.
How long will it take for the advance assurance to be approved?
It generally takes about four to six weeks for the advance assurance to be approved. Once it has been approved, someone from the government will reach to your listed contact.
Unless your application is incomplete or you have provided the wrong information, it should be approved without any delays. Once the application has been approved, you can now have a lot of leeway with the amount of capital that you raise. With the assurance in hand, you can now raise capital and attract investors with ease.