Seed Enterprise Investment Scheme after the Mini Budget

As part of its growth strategy outlined in the Mini Budget (and retained by the new Chancellor), the government is widening the criteria of the Seed Enterprise Investment Scheme (SEIS), including allowing firms to now raise £250,000 under the scheme - 66% more funding than previously.

This is aimed at helping businesses to access the finance they need to grow.

Francis Jackson, a Tax Manager in our Bristol office, takes a look at the SEIS and its counterpart the Enterprise Investment Scheme (EIS) following the Mini-Budget

Seed Enterprise Investment Scheme 

The Seed Enterprise Investment Scheme (SEIS) provides tax relief for individuals prepared to invest in new and growing companies. It is the junior version of the Enterprise Investment Scheme (EIS).

Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business.

The Emergency Mini Budget announced a series of changes to the SEIS, aimed at boosting UK economic growth and entrepreneurship.

Currently investors can benefit individually from 50% income tax relief on their investments (with an annual investor limit of £100,000).

Taking effect from April 2023, the key changes to the scheme are as follows:

• The annual investor limit will be doubled to £200,000


• Companies will be able to raise up to £250,000 of SEIS investment – an increase of two thirds on the current limit of £150,000


• An increase in the gross asset limit of companies from £200,000 to £350,000 


• An increase in the age limit of companies that can use the scheme, from two to three years

A widening of the current SEIS criteria will increase the number of companies that will qualify for the scheme; a welcome change for start-up companies who are seeking capital investment. 

The new Chancellor, Jeremy Hunt, has confirmed his commitment to this policy.

Enterprise Investment Scheme and Venture Capital Trusts

In addition to the changes regarding SEIS, the government has announced that it plans to renew both the Enterprise Investment Scheme (EIS) and the Venture Capital Trust (VCT) Scheme beyond their current deadline of 2025. 

Again, aiming to bolster economic growth, both schemes grant investors 30% income tax relief on qualifying investments.

Until now, the sunset clause, created as part of EU state aid rules, has only granted income tax relief to subscribers for shares issued prior to 6 April 2025. This deadline looks to be extended and further details on this are to be confirmed in due course. 

If you would like to discuss these changes, please contact your usual Bishop Fleming advisor.