VCM60010 - Venture Capital Schemes Manual: venture capital schemes: advance assurance requests: overview

The advance assurance service is provided by HM Revenue and Customs (HMRC) through its specialist unit, the Venture Capital Reliefs (VCR) Team.

The advance assurance service is a non-statutory, discretionary, service where HMRC may offer an opinion as to whether a prospective investment under the tax-advantaged Venture Capital Schemes would be a qualifying investment. HMRC will generally provide an opinion on whether or not an investment will qualify but there may be occasions when HMRC cannot give an opinion or the particular circumstances of the company may mean that they are unable to form an opinion.

The company must provide full information about the proposed investment including: its intentions; its structure and activities, the proposed investment, how the monies raised will be used, how it will meet each condition and any areas of doubt.

If the company does not make full disclosure of the circumstances that affect its eligibility the advance assurance will not be valid.

There is no requirement for a company to obtain an advance assurance before receiving an investment or issuing shares (or securities, where relevant) to investors under any of the venture capital schemes. A company may issue shares (or securities) without an advance assurance.

If a company has already issued the shares or securities to investors then the company cannot apply for advance assurance.

Companies seeking investment under any of the Venture Capital Schemes (VCS), listed below, may seek an advance assurance from the VCR Team that a prospective investment is likely to be eligible, before issuing the shares (or securities, where relevant). Detailed guidance for each scheme can be found by clicking the relevant link:

The choice of which scheme(s) a company may wish to apply for to enable its investors to qualify for tax reliefs is entirely up to the company seeking to raise the funding. The operation and benefits attached to each scheme vary widely.

For the EIS, SEIS and VCTs, a company must submit a completed advance assurance application form. Applications made without a completed advance assurance application form will be rejected.

For guidance on applying for an advance assurance under the SITR scheme, see VCM60320+.

An advance assurance is not an assurance as to the availability of tax reliefs to any particular investor, because additional conditions apply to investors. Investors must be certain they meet these conditions before making a claim to tax relief.

The VCR Team does not deal with the investors’ claims for reliefs. Investors’ claims are dealt with by the personal tax office that deals with that individual.

The rules of confidentiality apply. Any requests will be dealt with only if they are authorised and submitted by the company’s secretary or director of the company, or a person authorised by them to negotiate with HMRC on their behalf, see VCM60030. Potential investors making enquiries about a company must address those enquiries to the company, not HMRC. HMRC cannot disclose information about a company to anyone owing to its duty of confidentiality, unless the company authorises disclosure or in exceptional circumstances such as by court order.