By Nick James
Under the Seed Enterprise Investment Scheme (Seis) investors can receive up to 78% tax relief when they invest in small start-up businesses.
Although it was launched in April many potential investors are still unaware of the scheme.
Doug Richard, a former “dragon” from the BBC’s Dragons’ Den and the founder of School for Start-ups provides insight on “potentially one of the most extraordinary incentives ever created”.
He believes “this will be the beginning of the golden age in the UK for start-up activity. It has the potential to be transformative — but it doesn’t turn in one day.”
We asked members of the UK200Group of independent accountancy and lawyer firms for their views.
Alan Boby, taxation and wealth management partner, UK200Group firm Ellacotts LLP
“I am inclined to agree with Doug Richard and I started telling people about this as soon as it was announced. Seed EIS is a very valuable relief in the right circumstances. However, the conditions for the tax reliefs are ‘tight’ and apart from a few company clients in start-up mode the success of this tax relief will depend upon good match-making like we see with the Dragon’s Den.
“I note that there are a couple of providers on the internet who are trying to drum up business on the back of this relief but I am not sure whether they have yet gained much traction. I have had some enquiries about what investments are available to individuals and that is the trick — knowing what new start-up companies are out there looking for investment capital. Accountants do have an important role to play here.”
David Ingall, consultant, UK200Group firm JWPCreers said;
“The message being sent out on Seis is so very different from the hysterical headlines about "abusive tax planning" not so many weeks ago.
How can the government be so po-faced about tax schemes when here they are offering what is in every sense a tax scheme? The take up is apparently very poor but these schemes are offered and just sit there waiting for some artful tax planner to offer them to Jimmy Carr or whoever.
One gets the impression that HMRC don't want these schemes to succeed, it reduces their tax take!”