Impact of Employment Allowance on SEIS Max Investment Amount
In this video we flag a potential issue for founders who are seeking funding under SEIS and may not be aware that the NIC Employment Allowance can impact on the max £150,000 amount that can be raised under SEIS
A short video to highlight a potential issue relating to the impact of changes to the Employment Allowance on SEIS investment limits with effect since 6 April 2020.
This is not a new change but it doesn't appear to be widely appreciated, so I thought it was worth (re)flagging.
The SEIS has been classified as De Minimis State Aid since its inception in 2012 but the Employment Allowance has only fairly recently (April 2020) been reclassified as De Minimis - this means that since 6 April 2020, it counts towards the maximum funding limit under SEIS (currently £150,000, set to increase to £250,000 in April 2023).
On this basis, entrepreneurs and founders of companies that are seeking funding under SEIS need to take care to ensure that they don't breach these de minimis rules.
They also need to disclose the employment allowance in their disclosures to HMRC regarding de minimis funding already received, if they claim it.