The Seed Enterprise Investment Scheme and the Enterprise Investment Scheme are government approved schemes which provide significant tax reliefs to UK tax paying individuals who invest in early stage  UK companies by subscribing for shares  in such companies.  

How SEIS  and EIS  benefit the gaming sector

For any young business in the games sector,  SEIS and EIS are important to understand as the reliefs they offer will often be a key incentive for a potential investor to provide early stage equity investment in you studio.

Main rules that apply to both SEIS and EIS

  • SEIS and EIS  are tax reliefs  that benefit the individual investor – not the company receiving finance
  • only eligible  UK tax paying individuals can benefit from the relief.
  • SEIS and EIS reliefs will generally not be available to founders or management of the funding company
  • the investors’ investment must take the form of full-risk ordinary shares
  • the  business that is  carried on by the fundraising company must qualify under the specific rules (e.g. a video game development company will generally qualify). This is the area that most often requires specialist advice.
  • the shares in the fundraising company that are subscribed for by the investor must be:
    • full risk ordinary shares
    • held for three years

Main rules that apply specifically to SEIS

  • the fundraising  company must have 25 or fewer employees, gross assets of no more than £200,000 and must no more than 2 year old
  • the maximum amount a company can raise under SEIS is £150,000 capped  at £100,000 per individual investor per tax year
  • the investor can offset up to 50% of the investment against his/her income tax liability
  • no capital gains tax will apply to the sale of the shares in the company
  • the investor ,can set off any loss its investment against its  income tax liability

Rules that apply specifically to EIS

  • the fundraising company must have 250 or fewer employees, gross assets of no more than £15 million and must be no more than 7 years old
  • the maximum a company can raise under EIS is £5,000,000 capped at £1,000,000 per  individual investor per tax year
  • the investor can offset up to 30% of its  investment cost against its income tax liability
  • no capital gains tax will apply to the sale of the shares in the company
  • the investor can set off any loss on its investment against its income tax liability

To find out more about these two schemes please follow the link provided on the right hand side.