GF010 – What trades qualify for SEIS / EIS + potential problems for software (saas) companies!

Get Funded! podcast covering SEIS and EIS

In this episode of the Get Funded! podcast we cover the types of trades that qualify for funding under the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS).

We discuss the HMRC excluded activities list that you need to check to confirm that your proposed trade is not listed i.e. excluded. If not, then you should be okay.

There is a relaxation for these excluded activities to be included within your trade although it must not amount to a ‘substantial’ proportion of your overall trade. ‘Substantial’ for these purposes is deemed to amount to no more than 20%. The HMRC advance assurance procedure would be key in these circumstances.

We pay particular attention to the potential problem for software companies (particularly software-as-a-service (Saas) based companies) given that the receipt of royalties or licence fee income IS an excluded activity. There is a carve-out from this exclusion for companies that create the whole or greater part of the underlying asset that generates the licence or royalty fee income –  most software companies rely on this exemption to qualify for SEIS / EIS – but there are some further traps for the unwary….

March Budget 2014 – Key points for Digital, tech & creative companies

Highlights include: Increase in payable R&D tax credit for loss-making SMEs from 11% to 14.5% for expenditure incurred on or after 1 April 2014. This means that approximately 33% of qualifying spend is eligible for a tax credit rather than the current 24.75% Seed EIS (SEIS) turned into a permanent tax relief given its success … Read moreMarch Budget 2014 – Key points for Digital, tech & creative companies

Has your company missed out on EMI too?

Enterprise Management Incentive share option schemes (or ‘EMI’ for short) have long been a useful tool for entrepreneurial fast growing companies that wish to both tie-in key employees and incentivise them tax efficiently with the promise of jam tomorrow in the form of a slice of the share equity. The peculiar thing as evidenced from … Read moreHas your company missed out on EMI too?

Reform needed for 5% shareholding req for Entrepreneur’s Relief

Current tax rules require shareholders to be officers or employees of a company and hold 5% of the ordinary shares (and voting rights) for a 12 month period prior to sale to qualify for the holy grail of entrepreneur’s relief (ER) – ER results in a 10% personal capital gains tax rate (CGT) as opposed to a top … Read moreReform needed for 5% shareholding req for Entrepreneur’s Relief

Budget 2011 must support entrepreneurs

With a little less than 30 minutes to go until the Budget speech, I am looking forward to a pro-entrepreneur business set of proposals and actions to support growth for the future. Looks like the Institute of Directors (IoD) are too with some of their proposals – here’s one in particular that I like: Introducing … Read moreBudget 2011 must support entrepreneurs

What does Entrepreneur’s Relief mean for you as a business shareholder?

It was nice to be quoted in today’s North West BusinessDesk.com (registration required) on why now might be a good time for entrepreneurial business owners to consider selling or exiting their business. I thought it might be useful to expand on this short published article. You may have heard in the fairly recent Emergency Budget … Read moreWhat does Entrepreneur’s Relief mean for you as a business shareholder?

2010 Year End Tax Planning Tips for UK Entrepreneurs

Given that the 5 April 2010 UK tax year end is imminent, we are busy advising our UK entrepreneurial clients on ways in which they can arrange their tax affairs to pay the right amount of tax – and not a penny more! Here are just some of the issues we’re discussing – remember, you … Read more2010 Year End Tax Planning Tips for UK Entrepreneurs

UK Innovation Investment Fund – Too little, too late?

Launch of the £200m UK Innovation Investment Fund could not come at a better time as funding for early stage technology, digital and life science companies continues to dry-up – worrying given that these are the innovative fast growth companies that our UK economy is relying on to dig us out of our UK budget … Read moreUK Innovation Investment Fund – Too little, too late?