HMRC offers an advance assurance application service for both the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). How do I apply? What information is needed?
Subscribers see EIS: Enterprise Investment Scheme (Subscriber guide).
This is a freeview 'At a glance' guide to advance assurance for EIS and SEIS.
Companies can apply to HMRC in advance of offering shares under either scheme to check that they meet the stringent qualifying criteria. There is no requirement to apply for advance assurance. It is a non-statutory discretionary service.
Advance assurance relates to the company; it does not confirm that an individual investor will qualify.
All applications for advance assurance can be made using the online form, except for Social Investment Tax Relief (SITR), which must have a covering letter, with supporting documents sent either via email or by post.
Companies need to make separate applications for each proposed investment for which they want advance assurance.
The assurance relates to the specific investment and will not apply if there are any material changes to the proposed investment or facts after the assurance has been granted. In these circumstances, a revised application should be made to HMRC.
Companies will need to provide their details and tax reference together with the following information for HMRC:
- Details of the amounts intended to be raised.
- Details of what these monies will be used for.
- Latest company accounts and accounts of any subsidiary company.
- Details of all trading or other activities to be carried on by the company and any subsidiary and details of which company(ies) will use the money raised by the share issue.
- The latest draft of any prospectus or similar document to be issued to potential investors.
- The company's business plan.
- An up-to-date copy of the Memorandum and Articles of Association with details of any changes to be made.
- A copy of the register of members at the date of submission of the advance assurance application or at the date of the EIS1 compliance statement.
- Details of any subscription agreement or other side agreement to be entered into by the shareholders.
- A signed letter from one of your directors or trustees if you are allowing an agent to act on your behalf.
- Any other information relevant to this application.
- The company must explain how the money will be used to promote the new growth and development condition (EIS).
- If applying for an EIS or SEIS scheme, the names and addresses of any prospective investors, unless the company is listed on AIM or investment is through a fund manager/business promoter/crowdfunding platform (in which case you must provide evidence they have agreed to act on your behalf and they have agreed to continue to work with you).
- A company that does not meet the new general age limit will need to show how the qualifying conditions are met.
- Documents to support the company’s view that it is a knowledge-intensive company, if applicable and that it meets the Risk to capital condition.
For SEIS applications only:
- Details of any other ‘de minimis aid’ received.
- Confirmation that no shares which qualified for EIS have previously been issued or that the company has not received any previous investment from a Venture Capital Trust.
The form can be completed and submitted by:
- A company secretary.
- A director.
- An agent you have authorised to act on your behalf.
Improvements following consultation
In December 2017 HMRC, in response to its consultation 'Tax-advantaged venture capital schemes – streamlining the advance assurance service', confirmed that the service will continue with a number of steps to improve the service.
- As a discretionary, non-statutory service, HMRC may decline to give an opinion.
- Where a company is relying on a particular interpretation, it should provide a full technical analysis of how it meets that law. HMRC will not opine where it believes the application is testing the limits, not seeking to allay genuine concerns
- From 2 January 2018, HMRC will not opine on speculative applications. The company should have approached potential investors, and name the individual(s), fund manager(s) and other promoter(s) who are expected to invest.
- From 4 December 2017, HMRC will not opine where it is reasonable to conclude that the investment is part of a capital preservation scheme.