Reviewed by the Legal Foundations editorial team. Last updated: March 2026.

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1 SEIS Advance Assurance: How to Apply

SEIS Advance Assurance: How to Apply

Most angel investors won’t write a cheque without seeing your SEIS advance assurance letter. That’s not pedantry — it’s rational. SEIS offers investors 50% income tax relief on their investment, plus complete Capital Gains Tax exemption on any profit if the shares are held for at least three years. Those reliefs are worth real money. If the investment doesn’t qualify, the investor loses them.

Advance assurance is HMRC’s pre-confirmation that your company looks eligible for SEIS. It doesn’t guarantee anything, but it gives investors the confidence to proceed. This guide explains what it is, how to apply, what to include, and where to get help if the standard application doesn’t cover your situation.

What Is SEIS Advance Assurance?

Advance assurance is a letter from HMRC confirming that, based on the information you’ve provided, your company is likely to qualify for the Seed Enterprise Investment Scheme (SEIS) in respect of a proposed share issue.

A few important clarifications:

It’s not a guarantee. HMRC issues advance assurance based on what you’ve told them. If the facts change after you receive the letter — or if you provided inaccurate information — HMRC can still refuse to accept the SEIS1 compliance statement after investment. The advance assurance letter says “likely to qualify”, not “definitely will qualify”.

It’s not a legal requirement. You can take SEIS investment without advance assurance. There is no rule that says you must obtain it before issuing shares. In practice, treat it as mandatory — sophisticated investors will expect it, and proceeding without it signals either naivety or a qualification problem you’d rather not surface.

It’s different from the SEIS1 form. The advance assurance application is made before investment. The SEIS1 (compliance statement) is filed after investment, once you’ve spent the money on qualifying activities. HMRC then issues SEIS3 certificates to the investors so they can claim their relief. These are three different documents at three different stages.

Does Your Company Qualify for SEIS?

Before applying, run through the basic eligibility criteria. These are the rules as updated by the 2023 Finance Act.

Your company must:

Be incorporated in the UK, or non-UK incorporated but UK tax resident
Be a genuine trading company (investment companies and property vehicles don’t qualify)
Have been trading for less than 3 years at the time of the share issue
Have fewer than 25 full-time equivalent employees
Have gross assets of less than £350,000 immediately before the share issue
Not have previously raised more than £250,000 in total under SEIS

Excluded sectors include banking, insurance, leasing, farming and market gardening, forestry, property development, legal services, accountancy services, and certain types of energy generation. If your business has any activities in these areas — even as a secondary revenue stream — take advice before applying.

The 2023 reforms:

SEIS was significantly improved in April 2023. The company investment limit increased from £150,000 to £250,000 (lifetime). The individual investor annual limit increased from £100,000 to £200,000. The gross assets test was raised from £200,000 to £350,000, and the employee limit increased from 25 to 25 FTEs (replacing the old “25 employees” test with a full-time equivalent calculation). These are materially better terms for early-stage founders.

Quick eligibility check:

If you’re a UK tech or SaaS startup less than 3 years old with fewer than 25 employees, under £350k in gross assets, and you haven’t previously raised £250k under SEIS — you almost certainly qualify. Check the excluded sectors list and you’re likely clear to apply.

Do You Need Advance Assurance?

Strictly speaking: no. The legislation doesn’t require it. You can issue shares to SEIS investors and file the SEIS1 compliance statement without ever obtaining advance assurance.

Practically speaking: yes. Here’s why:

Sophisticated angel investors and SEIS funds will ask for it before committing. They’ve seen deals fall through at the compliance statement stage — the investment looked SEIS-eligible, the money went in, and then HMRC refused to certify because of a technicality no one had thought through. Advance assurance is their risk management tool as much as yours.

It also forces clarity. Going through the application process makes you articulate exactly what your business does, how it qualifies as a trading activity, what the investment will be used for, and how your share structure works. If you can’t write that clearly for HMRC, that’s a problem regardless of whether you get the assurance letter.

Timeline planning:

HMRC currently processes advance assurance applications in approximately 4–8 weeks, though this varies and can occasionally run longer. Factor this into your fundraising timeline — if you’re planning to close a round, don’t leave the advance assurance application until after your investor has said yes.

What HMRC Needs to See (The Application)

The advance assurance application isn’t a form — it’s a submission. HMRC expects to receive a package of documents that, taken together, give them enough information to assess whether the company qualifies.

The application typically includes:

The Cover Letter

This is the central document. It structures the information HMRC needs in a way they can assess efficiently. Our free generator creates a properly formatted cover letter ready to submit:

Free SEIS/EIS Advance Assurance Application Generator

Business Plan or Business Description

At minimum, HMRC needs to understand: what the company does, what market it operates in, and how the investment will be used. A full business plan is ideal. If you don’t have one, a detailed narrative description (2–5 pages) will usually suffice, provided it covers:

The nature of the trading activity (HMRC needs to be satisfied this is genuine trading, not passive investment)
The stage of development (pre-revenue, early-revenue, etc.)
How the investment proceeds will be spent (specifically — “working capital” is not enough)

SEIS advance assurance HMRC application guide

Accounts or Financial Projections

Include the most recent accounts filed at Companies House. If the company is less than 12 months old and hasn’t filed accounts, provide management accounts or a detailed financial projection. Pre-revenue companies can use projections — HMRC understands that early-stage companies may have no trading history.

Share Structure

Provide confirmation of the current share structure: total shares issued, share classes, who owns what. If you have a cap table, include it. Free Cap Table Template is available if you need one.

Previous SEIS/EIS Funding

Confirm whether you’ve previously applied for or received SEIS or EIS investment, and how much. HMRC will check this against the lifetime limit.

EIS Advance Assurance

If you’re planning to raise under both SEIS and EIS in the same round (which is possible — SEIS shares must be issued first), you can apply for both at the same time. EIS advance assurance requires additional information and is generally more complex — HMRC scrutinises the trading activity and investment purpose more carefully, particularly for companies that have been trading longer or have more developed financials.

How to Write the Cover Letter (Using Our Free Generator)

The cover letter does the heavy lifting. HMRC receives a large volume of advance assurance applications, and a well-structured letter makes the assessment easier and faster.

Our Free SEIS/EIS Advance Assurance Application Generator produces a properly formatted cover letter based on your company’s details. It asks for:

Company name, registration number, registered address, and website
Contact person for HMRC to correspond with
Nature of the business and sector
Date of incorporation and trading commencement
Number of employees (FTE)
Details of the proposed investment (amount, number of shares, proposed issue price)
Any previous SEIS or EIS applications or funding

Tips on the business description section:

HMRC wants to see evidence of genuine trading activity — or, if you’re pre-revenue, a credible and specific plan for how you’ll get there. Be specific about what you do. “We build software” is not enough. “We develop a B2B SaaS platform that automates [specific process] for [specific industry], currently with 12 paying customers generating £X MRR” gives HMRC what they need.

Avoid buzzwords. “Disruptive AI-powered platform” tells HMRC nothing about whether you’re a qualifying trade. “Machine learning software that analyses [specific data] to help [specific type of business] do [specific thing]” tells them everything they need.

Tips on use of proceeds:

Be honest and specific. HMRC will check the use of proceeds against the qualifying purpose requirement — the money must be used for the qualifying trade within 3 years. Typical qualifying uses: hiring, product development, marketing for the qualifying trade, working capital for operations. Non-qualifying uses: acquiring non-trading assets, repaying existing loans, paying dividends.

Submitting the Application

How to submit:

Send the application package by email or post to HMRC’s Venture Capital Reliefs team. Current contact details and submission address are on the HMRC SEIS/EIS advance assurance guidance page — confirm this before submitting, as HMRC occasionally updates its processes.

What to include:

The cover letter (generated via our tool or drafted by your lawyer)
Business plan or business description
Most recent accounts or financial projections
Cap table / share structure summary
Confirmation of any previous SEIS/EIS funding

What to keep:

Keep copies of everything you send. When HMRC responds, note the reference number they assign to your application — you’ll need this for future SEIS1 filings. If they request further information (which is common), respond promptly and in full.

After Advance Assurance: What Comes Next

You receive the advance assurance letter:

Share it with your investors. The letter confirms HMRC’s view that the company is likely to qualify and names the proposed investment round it relates to. Most investors will want to see the original letter.

Validity:

An advance assurance letter is typically valid for 3 years, but it relates to a specific proposed investment round — the amount, the share structure, and the company circumstances described in your application. If your circumstances change materially (you raise more than anticipated, your share structure changes, you add new share classes), the assurance may no longer apply and you should apply again.

After investment: filing the SEIS1

Once you’ve issued the shares and spent the investment on qualifying activities, file the SEIS1 compliance statement with HMRC. This must be filed within 2 years of the later of:
– The date the shares were issued, or
– The end of the period in which the money was used for qualifying purposes

HMRC then issues SEIS3 certificates to each investor. Investors use these to claim their 50% income tax relief and CGT exemption via their Self Assessment returns.

When You Need a Lawyer for Advance Assurance

For a standard case — a UK-incorporated tech startup, less than 3 years trading, simple share structure, no unusual investors — the generator-produced cover letter combined with your own business description and accounts will usually get the job done.

You should get legal advice if:

Your share structure is unusual (convertible notes, multiple share classes, existing preference shareholders)
You have subsidiary companies or group arrangements
Your business has mixed trading and investment activities
A previous advance assurance application was rejected or came back with conditions
You’re combining SEIS and EIS investment in the same round and the structuring is complex
You’ve been told you don’t qualify but you’re not sure why

Free Share Subscription Agreement (SEIS/EIS compliant)

Need help with a complex SEIS application? Speak to a startup lawyer who handles SEIS rounds regularly.

Speak to a startup lawyer

Frequently Asked Questions

How long does SEIS advance assurance take?

HMRC currently processes advance assurance applications in approximately 4–8 weeks. This varies — simple applications with complete documentation can come back faster; complex cases or incomplete applications take longer. Don’t leave it to the last minute before a planned funding close.

Can I use SEIS advance assurance for multiple investors?

Yes. Advance assurance covers the scheme and the investment round, not individual investors. You can share the letter with all investors participating in the round it relates to.

What if HMRC rejects my advance assurance application?

HMRC will usually explain why. Common reasons include: the company has been trading for more than 3 years (clock starts from first trading activity, not incorporation), the business activity is in an excluded sector, gross assets exceed the limit, or the share structure isn’t compatible with SEIS. If you receive a rejection or conditional response, take legal advice before reapplying — understanding the reason is as important as fixing it.

Do I need advance assurance before I can take SEIS investment?

No. There is no legal requirement to obtain advance assurance before issuing shares. Most sophisticated investors will expect it, but friends, family, and some angels may be willing to proceed on the basis of a self-assessment. The risk sits with the investor — if the investment doesn’t qualify, they lose the tax relief.

Can I apply for SEIS and EIS advance assurance at the same time?

Yes. HMRC will assess them together. In a combined SEIS/EIS round, SEIS shares must be issued first (before EIS shares can be issued in the same company), and the amounts raised under each scheme are separately limited. The EIS advance assurance application involves additional requirements and may take longer to process.

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