This share offer has Advance Assurance from HMRC that it qualifies for Seed Enterprise Investment Scheme Tax Relief. That means investors will be able to claim tax reliefs on the value of their investment (dependent on personal circumstances):
- 50% of their income tax liability for the current or previous tax year (you choose which one to claim it against)
- 50% relief of Capital Gains Tax on any capital gains used to invest into the share issue
So, if you invested £500, you would be eligible to reduce your tax bill by £250. If you used a capital gain to make the investment, you’d also reduce your capital gain tax liability on it from £140 to £70, giving a combined tax benefit of £320 In order to benefit from the tax relief, you must be a UK income and/or capital gains tax payer with tax due to pay equal or greater than the amount of relief you’re seeking.
Charge My Street intend to apply for the tax relief certificates following the successful close of this offer, and send them to investors shortly after that. The tax relief can be applied to the year you choose – either the year the investment was made, or the previous tax year.
If you pay tax via PAYE, you send the certificate to the tax office that processes your employer’s payroll tax collection, and if you do self assessment, you claim the relief when completing your tax return (unless you want to backdate it for a tax year you’ve already filed a return for, in which case you have to contact HMRC directly).
SEIS relief is only available on the £130,000 of investment sought (from individuals i.e. excluding organisational investment). Charge My Street are not looking to raise investment in excess of their SEIS limit at this time, but may launch an EIS eligible offer in the future.
As a condition of being able to offer the relief, no investment can be withdrawn for at least three years after the date of the investment, and Charge My Street will therefore not be in a position to consider withdrawal requests until 2023 at the earliest, and their financial projections are built around this withdrawal starting in that year.
Tax advice cannot be given, and the Society can only vouch that they have received Advance Assurance from HMRC that the investment qualifies for SEIS. Anyone considering investing with tax relief in mind should contact a financial advisor to establish whether they themselves would be eligible.