EIS and SEIS advance assurance

Advance assurance is HMRC’s opinion, given before any shares are issued, that a planned EIS or SEIS fundraising is likely to qualify. The company applies online to HMRC’s Venture Capital Reliefs Team with its business plan, forecasts, accounts, articles, investor documents and, on a first raise, details of the people who intend to invest. HMRC aims to answer most applications within 15 working days and complex ones within 40 working days.

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What is advance assurance, and do you have to get it?

It is a non statutory, discretionary service. HMRC’s Venture Capital Schemes Manual at VCM60010 is clear that a company does not need advance assurance before issuing EIS or SEIS shares, and there is no right of appeal against the team’s decision (VCM60050). Its value is commercial: gov.uk says you can use it to show potential investors that an investment may qualify.

Two limits shape how useful it is. First, it covers the company and the share issue, not the investors: each investor must still meet the investor conditions, such as not being connected with the company. Second, gov.uk warns investors that it is not an endorsement of the company or of how the investment will perform. It is also timing sensitive: HMRC will not give advance assurance once the shares have been issued (VCM60150). At that point the only route is the EIS1 or SEIS1 compliance statement.

What must be in place before you apply?

The company must already exist and be registered for Corporation Tax. VCM60020 says it needs its Unique Taxpayer Reference and its Companies House registration number to complete the mandatory application form. Before applying, the company must be satisfied, and able to show, that:

it is a genuine growth company meeting the risk to capital condition;
it will be a qualifying company for the scheme;
the shares will be eligible shares, which broadly means ordinary shares with no preferential right to assets and no redemption right;
the money will be raised for a qualifying business activity and used only by companies within the rules.

Only a director, the company secretary or an authorised agent can apply. An agent must include a signed letter from the company dated within the last three months, and must confirm the authority with every new application. HMRC returns unread any application made by anyone else (VCM60030). You need a separate application for each proposed investment.

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What documents do you send?

For EIS and SEIS the gov.uk guidance lists:

how much money you plan to raise;
the business plan and financial forecasts;
the latest accounts, if any;
which companies will use the money;
details of all trading and other activities and how much you expect to spend on each;
the current memorandum and articles, and any changes you expect to make;
the register of members as at the date of application;
the latest draft of any document used to explain the offer to investors;
details of any other agreements between the company and its shareholders;
an explanation of how you meet the risk to capital condition and, for EIS, how the money will be used to grow and develop the company.

VCM60120 adds that the business plan should not be written for HMRC. It should be the document you show real investors, with the detail a bank or market investor would expect, explaining how the money will be spent, what follow on funding is likely and how the investment will lead to growth in turnover or employees. Where the round is follow on funding, the plan should explain how the previous money was used. The company must also flag any area of doubt. An assurance given on limited disclosure is not valid.

Why does HMRC want to know who your investors are?

HMRC does not accept speculative applications. Under VCM60130, a company that has never raised money under EIS, SEIS, VCTs or SITR must show it is likely to raise the money:

Raising directly from investors: names, addresses and intended amounts for investors who together account for a serious share of the round. Naming one or two people putting in a small part is not enough.
Through a fund manager or promoter: evidence that it has agreed to act for you, even if provisionally.
Through a crowdfunding platform: evidence that the platform has accepted the proposal and started screening.
Listing on AIM: the name and registration number of the nominated adviser. Companies already on AIM need not give investor details.

Companies that have raised under the schemes before are not rejected automatically for leaving investor details out, but details of any fund expected to invest must always be given, and investor information may still be needed to show the risk to capital condition is met.

How long does it take, and what comes back?

VCM60170 says HMRC aims to respond to most applications within 15 working days, and to complex cases within 40 working days. The response may be an assurance, a refusal or a request for more information. A refusal comes with a brief explanation; an incomplete application gets no feedback at all. Once HMRC has given its opinion it will engage in no more than two rounds of correspondence, and if the details change after an assurance is given you must make a new application.

Plan the timetable around this. If you are using an advance subscription agreement, HMRC expects you to apply before the agreement is signed.

When will HMRC refuse, or not be bound by an assurance?

VCM60150 says HMRC will not give an assurance if it is not satisfied the conditions are likely to be met, and may decline to give an opinion where the facts do not allow a conclusion, where the arrangement looks like tax avoidance or aggressive planning, where the terms would protect investors by ensuring equity is repaid, or where the risk to capital condition or the disqualifying arrangements rule looks likely to fail. A refusal is not a final view of the law; HMRC may prefer to look at the facts when the compliance statement comes in.

Under VCM60140 HMRC is not bound by an assurance if the terms of the deal change materially, the information was incomplete or misleading, the substance of what the company does turns out to be different, a court decision changes the accepted reading of the law before the shares are issued, or the law itself changes.

Does advance assurance cover knowledge intensive status?

Only when it is needed. VCM60110 says HMRC will consider whether a company is a knowledge intensive company only where the investment would otherwise breach the funding, age or employee limits, or where named investors need the £2 million investor limit. In the second case you must give those investors’ names and addresses.

What happens after the shares are issued?

Advance assurance does not replace the statutory process. You still file a compliance statement once the conditions for filing are met. With it, you tell HMRC about any changes since the application, otherwise the assurance no longer applies, and you send copies of any documents that have changed. VCM35020 says HMRC is bound by its opinion as long as the compliance statement matches what was disclosed. You do not have to raise the full amount in the application. The company must then keep to the rules for three years; see the Enterprise Investment Scheme guide.

Illustration only. A software company plans a £400,000 EIS round to close in March. It applies in late January with its investor deck, forecasts and the names of three angels committing £300,000. HMRC asks one question about a director’s other company, the company answers, and assurance is issued in February. Between application and issue the company adds a new share class; it must flag that change and send the amended articles with its EIS1, or the assurance will not apply.

What mistakes come up most often?

Applying after shares, or an advance subscription agreement, have already been issued or signed.
Sending a business plan written for HMRC rather than for investors, with no clear use of funds.
Giving too few investor names on a first raise.
Not disclosing an intermediary; VCM60130 says failing to do so invalidates the assurance.
Changing share rights, investors or the use of funds and assuming the old assurance still holds.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.