Despite the UK economy being in the news for all the wrong reasons at the moment – strikes paralysing the transport sector; taxation penalising higher earners; recession around the corner – entrepreneurs have been given a bit of extra help thanks to increased allowances for the Seed and Enterprises Investment Schemes (SEIS), both of which have been funnelling record amounts of money into start-ups.
They help supercharge the ability of small British businesses to raise money, attract talent and ultimately grow and succeed.
From April 2023, the amount companies can raise under the SEIS will increase by £100,000 to £250,000, and the gross asset limit will increase from £200,000 to £350,000.
The company age limit will also increase from 2 to 3 years, and the annual investor limit will be doubled to £200,000. This package will help over 2,000 start-up companies raise the capital they need to grow.
As well as providing seed funding, these schemes have helped create networks of specialist Angel investors who can spot which new ideas to back and help them through the difficult first few years.
So what is SEIS in the first place?
SEIS (Seed Enterprise Investment Scheme) was created over a decade ago to support the UK’s economy by putting the spotlight on new businesses.
What are the benefits that SEIS offers?
SEIS can help startups boost profits as it allows entrepreneurs to receive funding to support their business. It can also reduce financial risks as businesses can use SEIS instead of loaning money that comes with high interest.
Understanding the SEIS tax relief
SEIS offers various types of tax relief to investors such as capital gains, inheritance and income tax relief. Capital gains tax relief includes ‘reinvestment relief’, where a gain arising in the last tax year on a disposal of any asset is reinvested in shares in a company on which you get SEIS Income Tax relief.
SEIS is a scheme that should be applauded, helping investors in the UK navigate through current economic challenges as well as an impending recession. It’s a great opportunity for entrepreneurs to continue thriving in any economic climate.