Note on EIS eligibility and advance assurance:
Freetrade has been eligible for SEIS and then EIS from the very start and all of our crowdfunding investors that were eligible to claim this type of tax relief have been able to do so.
HMRC provides a service to companies for obtaining “advance assurance” or “AA” on eligibility for EIS before an investment round, so that investors can feel assured that they will be able to claim the relief before investing. We’ve applied and received this before, which we included in the pitch documents.
That said, there is no requirement to obtain AA. If a company is eligible, they are eligible regardless of an AA letter.
As we have been confirmed as eligible before, it follows that we are still eligible unless we now violate the criteria. We haven’t. In fact, we have to keep following the EIS rules for three years after the issue of shares otherwise our existing investors would lose the relief. There are limits on the amount of EIS available though:
- There is a limit of £5 million per 12 month period
- There is a limit of £12 million in total over the life of the company
There are rules for EIS investors as well, such as how long they need to hold the shares before selling and still maintain the tax relief. This depends on your personal circumstance and you should seek your own tax advice.
You can read more here on the EIS scheme and the rules : Use the Enterprise Investment Scheme (EIS) to raise money for your company - GOV.UK
Any discussion beyond the facts stated above would be best posted on the Crowdcube pitch page/forum.