SEIS: income tax relief: company and investor procedures: company procedures: overview
Before investors can claim any tax relief, the company must complete a compliance statement (form SEIS1) and send it to the SCEC (contact details at VCM35010). There is no time limit within which the company must provide its statement, but companies need to be aware that investors cannot claim tax relief until the procedures described below have been completed.()
In outline, the statutory procedure for obtaining relief in respect of a subscription for shares is as follows:
- The company that has issued the shares supplies a statement to HMRC on form SEIS1. the form lists the subscribers who have requested certificates, It also contains a Declaration that at the time of completion, the company has already met the requirements of the scheme to the extent that those requirements have to be met at the time of issue of the shares and from that time to the date of the Declaration; and that it expects to meet all other requirements for the period for which they are required to be met. Form SEIS1 is available on the HMRC website at http://www.hmrc.gov.uk/forms/seis1.pdf
- If on examining the statement HMRC is satisfied that it should do so, it will send the company the appropriate number of blank forms SEIS3, using form SEIS2 to authorise it to issue certificates.
- The company completes the certificates and sends them to the subscribers.
- Each subscriber - or, where the subscriber is a nominee, the beneficial owner of the shares - can then claim relief (see VCM35150 regarding claims to relief).
The company cannot submit an SEIS1 until either:
- it has been trading for at least four months, or
- it has spent at least 70 percent of the monies raised by the relevant issue of shares.
This process must be followed for every issue of shares in respect of which it is intended SEIS relief will be claimed.
An appeal can be made against a decision by HMRC not to authorise a compliance certificate (ITA07/S257EE).
A maximum penalty of up to £3,000 may apply where a company negligently or fraudulently issues a certificate or statement or issues one in breach of the conditions in ITA07/S257EC.