The number of applications being rejected for the government backed tax schemes SEIS and EIS has skyrocketed. The schemes offer generous tax reliefs to incentivise investment and are a great way of bringing together businesses requiring equity investment and investors who can protect the downsides of investments.
The most recent numbers from HMRC confirm that for the Seed Enterprise Investment Scheme (SEIS) the number of applications rejected for advanced assurance has risen from 14% to 40%, and for the Enterprise Investment Scheme (EIS) the rejection levels have increased from 19% to 40%.
Now it is fair to say that over the past few years HMRC have tightened the rules up and asked for more information than ever before for each application. HMRC also go through each application in much finer detail than they used to in order to make sure it qualifies.
However, these increases are huge and can only be down to one of a couple of reasons;
1 – The applications failing the rules for SEIS or EIS, or
2 – Incomplete applications or applications not covering off all the requirements
As mentioned, HMRC go through the application and the business plan and financial projections in much greater detail now, and this is clearly causing problems for those applying or their advisers.
Applying for a successful Advanced Assurance Certificate has become much specialist and requires a full understanding of the rules and how to present the business and its business plan in the correct way as part of the complete application.
As Snowball we understand how to produce applications and plans that meet all the requirements of HMRC and have now produced in excess of 40 applications for clients and we have a 100% success rate.
If you have any clients or contacts who need help with SEIS or EIS applications, please let us know.