Mini-budget extends SEIS – Chancellor introduces long-overdue reform

Key changes to announced to Seen Enterprise Investment Scheme (SEIS)

Maximum a company can raise under SEIS has increased from £150,000 to £250,000.
Companies can now raise SEIS money at a later stage, as long as gross assets are below £350,000 when a company is less than three years old.
Individual investors’ annual allowance doubles from £100,000 to £200,000.

Nicholas Hyett, Investment Analyst, Wealth Club said: “When it launched in 2012, the SEIS scheme allowed companies to raise a maximum of £150,000 and investors were able to invest up to £100,000 each year. It has done a fantastic job of matching up entrepreneurs with early-stage investors, but over the decade since its launch inflation slowly eroded the power of the scheme.

This left companies missing out on crucial additional early-stage funding. In real terms the SEIS funding available to businesses was as much as £42,000 less than when the scheme was founded – essentially depriving small companies of the equivalent of one full-time employee. Today the Chancellor has reversed that trend, not only restoring the scheme to where it was in 2012, but even adding a modest extension in real terms. This will be a significant boost for the very youngest companies in the UK.

The relatively low maximum investment, at £150,000 per company, has prevented many managers from operating in the SEIS space – because the fees earned on a successful investment didn’t justify the admin and due diligence involved. We would hope that the increase of the limit not only increases the resources existing managers have to offer small businesses, but encourages more to enter the market. Pair that with the increase in how much an individual investor can put into the scheme and the future for the UK’s very smallest businesses looks bright.”