SEIS / EIS Advance Assurance: Requirement to list potential investors

We cover the (chicken and egg!) situation regarding the requirement to include a list of names and addresses of potential investors on your advance assurance application to HMRC under the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS).

So you may have come across this conundrum when you are applying for your Seed Enterprise Investment Scheme (SEIS) or Enterprise Investment Scheme (EIS) advance assurance, whereby if you haven't submitted an application before, HMRC now expects you to submit the names and addresses of at least one potential SEIS / EIS investor.

It's a bit of a Catch-22 situation...

The reason is that HMRC were in the past finding that they were having to deal with a large number of reviews of advance assurance applications that never came to fruition i.e. that never actually got investment. So huge amounts of HMRC resources were being committed to reviewing often 'speculative' applications and therefore, in an attempt to focus on the more 'genuine' and serious applications, this extra 'hurdle' was added.

HMRC requires that you include the name(s) and address(es) of potential investors along with the amounts that they are expected to invest.

We often get asked whether this is REALLY necessary?

And the simple answer is: Yes, you do have to do this!

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    Some suggest that HMRC doesn't really care and so it is not necessary, but this is not true. HMRC pre-screens all applications and if you don't have these details included, then your application will get automatically rejected.

    If you're going to raise funding via a crowdfunding platform, then you need to provide evidence of letters or emails that you've exchanged with the crowdfunding platform to confirm that you have been accepted by them (even if this approval is subject to you getting clearance from HMRC via your advance assurance application).

    So,  it is a pain, but it's one of those things that you've got to deal with upfront I'm afraid. Better forewarned...!