Although the reliefs are claimed by and benefit investors, the company will need to be involved in claiming the reliefs. The process for claiming relief is as follows:
- The investment completes and the company receives the investment funds;
- Company submits form EIS1 to HMRC (this is an online form and it requires a lot of supporting documents, unless those documents were provided at advance assurance stage). Before the form can be submitted:
- for SEIS the company must have been trading for 4 months or spent at least 70% of the SEIS money; or
- for EIS the company must have been trading (or carrying on R&D which will lead to a trade) for 4 months. The EIS form must be submitted within 2 years of the end of the tax year in which the shares are issued (or in which the company starts to trade, if later);
- Provided HMRC accept the application, they issue form EIS2 to the company, and the company then has to issue certificates (EIS3) to the investors;
- Each investor is then responsible for claiming the relief in their personal tax returns.
We have more FAQs covering a range of topics to help your business available here.