In X-Wind Power Limited v HMRC [2016] investors in the company lost out on tax reliefs after the company submitted an EIS compliance statement to HMRC instead of the intended SEIS compliance statement.

Subject to meeting the relevant conditions, investors are entitled to income tax relief on their investments in a company; available at

In order to claim relief:

  • An investor must receive a compliance certificate from the company.
  • The company must receive authority from HMRC before compliance certificates can be issued.
  • The company must provide a compliance statement to HMRC In order to obtain that authority.

X-Wind Power Limited (the company) was incorporated in 2012

  • In September 2012 the company issued shares to eight initial investors.
  • Further shares were issued in December 2013 and January 2014.
  • In March 2013 the company submitted a compliance statement to HMRC in relation to the September 2012 share issue.
  • Due to a clerical error, an EIS1 statement was submitted instead of the intended SEIS statement.
  • The error was not noticed by the preparer, the director signing the form, nor was it picked up when HMRC granted authorisation to the company to issue EIS compliance certificates to the original investors.
  • In April 2014 the company submitted an SEIS compliance statement to HMRC.
  • HMRC refused to authorise the issue of SEIS certificates as there had been an earlier EIS investment.

The First Tier Tribunal (FTT)

  • Accepted that an honest mistake had been made.
  • Found that ITA section 257DK (2) provides that an EIS investment is made if the company issues shares and provides a compliance statement (form EIS1) in respect of those shares.
  • Agreed that once an EIS investment has been made no SEIS investment can be made.
  • Found that there is no provision in the legislation for the withdrawal, setting aside, replacement or revocation of an EIS1 compliance statement.
  • Expressed sympathy for the company’s argument that it is unfair that an adverse result of some magnitude should follow from a simple clerical error.
  • Was compelled to agree with HMRC that there was nothing it could do to assist the company out of its difficulty, and dismissed the appeal.


This is an unfortunate case which again highlights the importance of getting the details right when investors are expecting relief under the EIS and SEIS schemes.

It also shows the reluctance at HMRC to allow taxpayers to correct genuine mistakes which lead to an unintended loss of tax.  There was no dispute here that had the correct SEIS form been submitted originally it would have been accepted, as would the second SEIS form.


EIS: Enterprise Investment Scheme

SEIS: Seed Enterprise Investment Scheme

SEIS & EIS: share issue checklist

Case reference: X-Wind Power Limited v HMRC [2016] UKFTT TC05086