There are some positive changes on the horizon for the Seed Enterprise Investment Scheme ('SEIS') that should be good news for both founders and investors alike.
Announced by the new Chancellor, Kwasi Kwarteng, in his recent Mini-Budget held on 23 September, here is a summary of the key changes.
With effect from 6 April 2023:
- companies will be able to raise up to £250,000 of SEIS investment (up from the current cap of £150,000), a two-thirds increase;
- the gross asset limit will be increased to £350,000 (currently £200,000);
- the age limit [of the trade] of the company will be increased from 2 to 3 years;
- the annual investor limit will be doubled from the current limit of £100,000 to £200,000 per tax year.
These changes should make the relief more widely accessible for early stage companies, plus the increase in size limits of the investment amounts etc are much needed.
From our perspective:
A cap of £150k for SEIS investment was looking increasingly low, especially given that this limit had been left unchanged since the introduction of the SEIS relief back in 2012!
Note that these changes are proposals at this stage and are not proposed to come into force until April 2023.
It will be interesting to see how any transitional rules may come into effect for companies looking to raise funding under SEIS between now and April 2023... We'll keep you posted.