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A new leaf in early-stage UK venture: Snapshot of SEIS Changes to come April 2023

Updated: Sep 25, 2022

by Anishka Prasad

The SEIS and EIS Scheme introduced by Enterprise Investment Scheme Association (EISA) in back in 2012, has improved for the better in its efforts to catch up with the economic times of investing in early-stage venture in 2022!

Image Credit: business

Chancellor, Kwasi Kwarteng, announced the new government’s Growth Plan 2022 on 23 September 2022 in his “mini budget”, which introduces tax cuts for people and businesses, along with a host of other policies with the aim to ‘significantly reduce inflation and support growth in the short term.’ These changes are promising both from founders and investors perspective.

Under the current rules for SEIS, companies must:

  • Be trading for less than 2 years

  • Have gross assets valued under £200,000

  • Companies can raise up to £150,000 under SEIS

Snapshot of the SEIS Changes to come April 2023:

  • From April 2023, companies will be able to raise up to £250,000 of SEIS investment

  • To enable more companies to use SEIS, the gross asset limit will be increased to £350,000 and the age limit from 2 to 3 years.

  • To support these increases, the annual investor limit will be doubled to £200,000

  • SEIS and Company Share Option Plans will have increased the limits to make them more generous.

  • The annual investor limit will also increase from £100,000 to £200,000 to help support these changes.

  • Investors can claim up to 50% of their investment back through Income Tax relief – with further tax write-offs should the business fail – amongst other attractive tax benefits.

Although there haven’t been any crystalized changes noted in reference to the EIS scheme, the following from the “mini budget” shows promise in this respect as well:

"The government remains supportive of the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) and sees the value of extending them in the future."

It has also been mentioned that the Enterprise Investment Scheme and Venture Capital Trusts will extend beyond 2025.

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