Record year for SEIS, suggests study

A record number of businesses will raise funds through the Seed Enterprise Investment Scheme (SEIS) in 2017, a new study has revealed.

The research, published by Symvan Capital, shows that some 3,030 companies requested approval to raise funds through SEIS in the 2015/16 tax year.

This is six per cent more than in the 2014/15 tax year, indicating a record year for SEIS investment.

The SEIS is designed to help small, early-stage companies raise equity finance by offering tax reliefs to individual investors who purchase shares in those companies.

These smaller companies must seek permission from HM Revenue & Customs (HMRC) before it can proceed to raise funds.

Kealan Doyle, CEO of Symvan Capital, said: “We should see more companies than ever using SEIS for investment. The market is in rude health.

“Low growth companies like solar generators have been removed from EIS and SEIS investing, and the market is increasingly focusing on high-growth businesses, which can be defined as those that can provide robust short-to-medium term returns for investors.

“That’s what these schemes were originally intended for – to create employment in fast growing industries that can benefit the UK economy, rather than just providing low-risk income to investors. If an investor would not conceive of investing in a company in the absence of tax relief, why should public money be available to subsidise them?

“Small and medium-sized companies are finding it harder than ever to access vital funding to ensure growth, so the fact that more and more are being exposed to potential investors can only be good for UK business.”

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