SEIS Advance Assurance: How to Apply and What HMRC Wants to See

Most angel investors and seed funds in London will not wire money into your company until you can show them a letter from HMRC saying your share issue is likely to qualify for the Seed Enterprise Investment Scheme. That letter is called advance assurance. It is not a legal guarantee, and it does not lock in the tax relief, but it removes the single biggest worry an SEIS investor has: that they back you, hand over cash, and then find the company never qualified and their 50 per cent income tax relief evaporates. For a first-time founder raising a pre-seed round, getting advance assurance is usually the gating step before the money arrives.

The rules changed on 6 April 2023, and a lot of the advice still floating around online quotes the old £150,000 cap and the two-year trading limit. This is the current picture, checked against gov.uk and HMRC’s Venture Capital Schemes Manual, with the documents you need and the reasons applications get bounced.

What advance assurance actually is

Advance assurance is a non-statutory, discretionary service. HMRC’s Venture Capital Reliefs team reads your business plan and supporting documents and gives an opinion on whether the shares you propose to issue would be a qualifying SEIS investment. The key word is opinion. HMRC reviews the information you gave it; if the facts change, or you described the trade inaccurately, the assurance can fall away.

You do not legally need advance assurance to use SEIS. A company can issue shares first and submit a compliance statement (form SEIS1) afterwards to get the tax certificates for investors. In practice almost every early-stage founder gets advance assurance first, because investors ask for it by name. A clean assurance letter is part of how you build credibility with the kind of backers covered across Idea London, and it is far easier to close a round with one in hand than to ask people to trust that the relief will come through later.

The SEIS company conditions since April 2023

Before you apply, your company has to fit inside the SEIS box. These are the limits that apply to shares issued on or after 6 April 2023:

Up to £250,000 of SEIS investment across the company’s lifetime. This was raised from £150,000. The figure includes any other de minimis state aid received in the three years up to the date of investment.
Gross assets of no more than £350,000 immediately before the shares are issued. The old limit was £200,000.
Fewer than 25 full-time equivalent employees when the shares are issued. This threshold was not changed in April 2023; it applied before the reforms too.
A new qualifying trade that has been carried on for less than three years at the date of issue. The old limit was two years.
The company must be UK-established with a permanent establishment, not trading on a recognised stock exchange, and not controlled by another company.
The money has to be spent on a qualifying business activity within three years, and the trade must meet HMRC’s risk-to-capital condition: a genuine intention to grow the business, with a real risk the investor could lose more than they get back in relief.

Individual investors can claim 50 per cent income tax relief on up to £200,000 invested per tax year. That is the investor’s allowance, not the company’s; your company is still capped at the £250,000 total.

The named-investor requirement

This is the rule that catches founders out, and it is among the most common reasons a clean-looking application gets refused. HMRC will not deal with speculative applications. If your company has not previously raised under a venture capital scheme and is raising money directly from investors, you have to give the name and address of prospective investors, not just a hope of future interest. HMRC’s guidance and its advance assurance checklist treat investors who account for at least 30 per cent of the amount you are seeking assurance for as the kind of genuine commitment it expects to see.

So if you ask HMRC to assure a £150,000 round, you want named investors lined up for a meaningful slice of it, in the region of £45,000 or more. HMRC introduced the no-speculative-applications position to stop founders firing off assurance requests as a marketing tool before anyone had agreed to invest. The principle is set out in the Venture Capital Schemes Manual at VCM60230, which says it is not enough to provide the names of one or two investors expected to put in only a small proportion of the total. If your form lists no investor, or only vague references to a future crowdfunding campaign with nobody committed, expect HMRC to decline to give an opinion rather than process a hypothetical raise.

A few practical points. The named investor does not have to have signed anything binding; they have to be a real, identifiable person or fund showing genuine interest. If you are raising through a recognised crowdfunding platform, an FCA-authorised fund manager, or an AIM nominated adviser, that route can be accepted in place of individual names. A casual promise from a friend who has not been told the amount will not pass.

What HMRC’s application requires

You apply through the online form on gov.uk (search “apply for advance assurance on a venture capital scheme”). The reviewer needs a package of documents. Send all of it at once; a thin application that triggers follow-up questions adds weeks.

A stack of printed business documents and a laptop arranged on a wooden desk — A complete application includes the business plan, forecasts, pitch deck and articles of association.

The completed application form, with company details, the amount you intend to raise, and the scheme (SEIS, EIS or both).
A business plan setting out what the company does, the market, and how it intends to grow. This is where you evidence the risk-to-capital condition.
Financial forecasts, typically two to three years, showing how the SEIS money will be spent and the path to revenue.
The pitch deck or information memorandum you are using to raise, or any prospectus or fundraising document going to investors.
Details of the proposed investors, including the name and address of prospective investors, as above.
The memorandum and articles of association (and any shareholders’ agreement), so HMRC can check the share rights. SEIS shares must be full-risk ordinary shares with no preferential rights to assets on a winding up.
The latest accounts, if the company has filed any. A brand-new company will not have these, which is fine.
A list of any previous venture capital scheme investments and other de minimis state aid received in the last three years.
An explanation of how you meet the risk-to-capital condition, and details of all the trades and activities the company carries on with expected spend.

Common rejection reasons

The Venture Capital Reliefs team turns down or queries applications for a small set of recurring reasons. Knowing them in advance is the cheapest fix.

No named investor. A leading cause. HMRC reads it as speculative and declines to give an opinion.
The risk-to-capital condition is not met. If the plan looks like a low-risk, asset-backed or capital-preservation play rather than a company genuinely trying to grow, HMRC will refuse. Property, lending and similar “safe” models routinely fail here.
Excluded activities. Some trades cannot use SEIS at all: dealing in land, financial activities, leasing, legal and accountancy services, generating energy that benefits from subsidies such as feed-in tariffs, and others. Check the list before you spend time on the form.
A business plan that is too thin to show what the company does or how the money gets spent.
Share rights that break the rules, for example preference shares, or articles that give SEIS investors protection that ordinary shareholders do not get.
The company is already too old, too large, or has already raised over the limit. Three years of trading, £350,000 gross assets and £250,000 total SEIS are hard ceilings.

How long it takes and a step-by-step

HMRC does not publish a single guaranteed turnaround for advance assurance, and timings vary with the quality of the application and the team’s workload. A clean, complete application often comes back in around two to three weeks, while applications with missing information or an unclear trade description can stretch past two months. Plan your raise on the basis of roughly four to six weeks, and add buffer if your structure is unusual.

A wall calendar and desk clock beside a laptop on an office desk — Plan your raise around roughly four to six weeks for HMRC to respond to an advance assurance application.

The order of work usually looks like this:

Confirm eligibility. Check the trade is qualifying, the company is under three years old, gross assets are under £350,000, and you have fewer than 25 full-time equivalent staff.
Line up named investors with their name and address, covering a real share of the round. Without this, do not apply yet.
Prepare the documents: business plan, two to three year forecasts, pitch deck, memorandum and articles, any accounts, and the de minimis aid list.
Complete the online form on gov.uk, stating the amount and scheme, and attach everything.
Submit and wait. Respond promptly to any HMRC queries, because the clock effectively restarts on each round of questions.
Receive the assurance letter and share it with investors as part of your data room.
Issue the shares, then file the SEIS1 compliance statement after the company has been trading for at least four months or has spent at least 70 per cent of the money, so HMRC can issue the SEIS3 certificates your investors use to claim relief.

For the authoritative sources, the application route sits at the gov.uk page Apply for advance assurance on a venture capital scheme, the compliance side is covered at Apply to use the Seed Enterprise Investment Scheme, and the detailed rules the reviewers work from are in the Venture Capital Schemes Manual.

Frequently asked questions

Is advance assurance legally required to use SEIS?

No. You can issue SEIS shares and file the SEIS1 compliance statement afterwards without ever getting advance assurance. It is needed in practice because most investors will not commit until they have seen the assurance letter, and it confirms HMRC’s view before you take their money.

How much can my company raise under SEIS?

Up to £250,000 in total across the company’s lifetime, a limit that has applied since 6 April 2023 (it was £150,000 before). That figure includes any other de minimis state aid received in the three years up to the date of investment.

Do I really need a named investor before applying?

If your company has not previously raised under a venture capital scheme and is raising directly from investors, yes. HMRC will not process speculative applications; you need to give the name and address of prospective investors who represent a genuine, meaningful share of the raise. Applications with nobody committed tend to be declined.

How long does HMRC take to respond?

There is no single guaranteed turnaround. A clean application often comes back in around two to three weeks, while incomplete ones can take past two months. Build roughly four to six weeks into your fundraising timeline and allow extra if HMRC comes back with questions.

What is the risk-to-capital condition?

It is a test that the investment is in a company genuinely aiming to grow, with a real risk the investor could lose more money than they get back through tax relief. Low-risk, asset-backed or capital-preservation models tend to fail it, which is a frequent reason for refusal.

What happens after I get advance assurance?

You issue the shares, then submit the SEIS1 compliance statement once the company has been trading for at least four months or has spent at least 70 per cent of the funds raised. HMRC then issues SEIS3 certificates, which your investors use to claim their tax relief.