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VCM35040 | Venture Capital Schemes Manual: the Seed Enterprise Investment Scheme: company and investor procedures: company procedures: compliance statement: company conditions to submit compliance statement

From HM Revenue & Customs · Venture Capital Schemes Manual

ITA07/S257EC(2), S257ED

A company whose new shareholders ask it for certificates enabling them to claim relief cannot issue them without first obtaining authority from HMRC. To do this the company must provide HMRC with a compliance statement SEIS1 using the SEIS1 form to the effect that the conditions for the relief (apart from any which relate to the investor) have been satisfied so far, and that it intends to ensure that they continue to be satisfied.

The company cannot submit an SEIS1 until either:

  • it has been trading for at least four months, or

  • it has spent at least 70 percent of the monies raised by the relevant issue shares.

This process must be followed for every issue of shares in respect of which it is intended SEIS relief will be claimed.

It is not possible for a company to obtain authority to issue certificates once it has ceased to satisfy any condition. For instance, coming under the control of another company would make the issue of certificates impossible even where, had relief already been obtained, it would have been preserved by the operation of ITA07/S257HB (see VCM37030). A company may appeal against a decision by HMRC not to authorise a compliance certificate (ITA07/S257EE).

A maximum penalty of up to £3,000 may apply where a company negligently or fraudulently issues a certificate or statement or issues one in breach of the conditions (ITA07/S257EC).

More than one share issue

Where there is more than one issue of shares, the company must submit a separate statement in respect of each issue. All shares of the same class issued on the same day count as one issue.

If shares of a different class are issued on the same day, the company must fill in a separate compliance statement form SEIS1 in respect of each of the share issues. A company can undertake more than one share issue for each of the schemes – however the total amount of relief a company applied for cannot breach the appropriate limits for each of the schemes.