Advance assurance for EIS and SEIS
Obtaining advance assurance for EIS and SEIS from HMRC is crucial for ensuring your company qualifies before issuing shares to investors. Therefore in this article we will discuss the application process and some common pitfalls to avoid.
Overview
Your company can apply to HMRC before offering shares to potential investors. This process ensures that your company meets the stringent qualifying criteria for EIS and SEIS. Although applying for advance assurance isn't mandatory it is a useful non-statutory service offered by HMRC
It should be noted that advance assurance for EIS and SEIS relates to your company. It does not confirm that an individual investor will qualify for the relief.
Application process
You can make all applications for advance assurance using the online form. However, you need to submit separate applications for each proposed investment for which you want advance assurance.
Furthermore, the assurance relates to the specific investment and does not apply if there are any material changes after approval, to the proposed investment or facts after the assurance has been granted. In such cases, you must submit a revised application to HMRC.
Details required for Advance assurance for EIS and SEIS
When applying for advance assurance your company must provide:
For EIS, explain how your company will satisfy the new growth and development condition, For SEIS also include:
Prospective investors
When applying for advance assurance for EIS or SEIS provide the names and addresses of any prospective investors. If listed on AIM or investing through a fund manager, business promoter or crowdfunding platform, provide evidence of their agreement to act on your behalf and their commitment to work with you.
Moreover HMRC will not provide an assurance on speculative applications. Your company should have approached potential investors, and name the individual(s), fund manager(s) and other promoter(s) expected to invest.
Submission and response
A company secretary, director or authorised adviser can complete and submit the application form. Expect a response from HMRC within 6 to 8 weeks after submitting the application.
Advance assurance for EIS and SEIS from HMRC does not expire. However, changes to your company’s situation between the application and the shares issuance can invalidate the assurance. For instance, engaging in a non-qualifying trade may affect your status.
Therefore by following these guidelines your company can successfully navigate the process of obtaining advance assurance for EIS and SEIS. Moreover this proactive step can significantly enhance your appeal to potential investors.
For more useful information, check out our Ebooks here.
And if you'd like to know how we can help you with all of this, or with anything else, feel free to give us a call on 01202 048696 or email us at [email protected].
Alternatively, please feel free to complete our Business Questionnaire here