Looking to Offset Your Tax Bill?

Consider Investing in an SEIS Business

If you’re an investor, the chances are you’ve heard of the Seed Enterprise Investment Scheme (SEIS). The government-run incentive encourages investors to inject funds into certain business by offering them tax relief.

With the end of the financial year fast approaching, many people are beginning to consider their final tax bill and seeking ways to offset it.

With this scheme, investors can de-risk their investments by up to 72.5% through tax reliefs. As March is almost upon us, it’s the perfect time to make an SEIS investment, in order to reduce your tax bill for the year and make an investment with a potential return.

You don’t have to do your own taxes to benefit from this. If you pay your tax monthly – as most people on a salary do – you can claim back the tax you have paid by filling out a form.

How Does It Work?

Let’s say you are in the 45% tax bracket and are about to make an investment of £10,000.

You can get an initial 50% of your investment back as a tax bill reduction; this means £5000 that you would have paid in tax will be returned to you.

If the company is bought out at a higher valuation and your shares triple in value, you will get £30,000 (triple your investment).

You will pay no Capital Gains Tax on this, so the entire profit will be yours.

This makes the profit total £25k (£20k profit and £5k in tax relief).

What if the Company Fails?


This is a common concern for investors, however, SEIS offers a form of investment mitigation.

Again, let’s imagine you’re investing £10,000. As before, you will get 50% of your investment back as a tax bill reduction, meaning it will be reduced by £5000.

This leaves a remaining £5000 of your money which is at risk.

However, SEIS offers a loss relief at a rate of your tax bracket e.g. 45% x the capital at risk, which in this case, is £2,250.

This means the actual loss of your investment will be just £2,750, down from the £10,000 originally invested.

The investment has been mitigated by 72.5%!

What About Smaller Investments?

Not everyone wants to make a £10,000 investment, and that’s fine.

There is no minimum investment required in order to benefit from tax relief, so even if you made an investment of £1000, you would still be able to benefit from all the SEIS incentives, from tax reduction to mitigated risk.

Which Companies offer SEIS tax relief?

When you invest money in a company, it will tell you if it is on the scheme.

At Shadow Foundr, we hand pick businesses which are scalable, disruptive and which we believe have the best chance of delivering a successful return to you.

We are currently raising funds for a number of SEIS and EIS businesses, so if you’re looking to benefit from this fantastic scheme, please click here to browse our opportunities.

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