HMRC have published a consultation ‘Tax-advantaged venture capital schemes – streamlining the advance assurance service’. 

This relates to the advance assurance service provided for the Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS), Venture Capital Trusts (VCTs) and Social Investment Tax Relief (SITR).

Demand for advance assurance has trebled since 2011/12.  Response times are already lengthening and HMRC warn that any further increases in demand will have an impact on standards of service.

HMRC were asking for comments as to how the service can be made more efficient, and how cases with the greatest uncertainty could be prioritised.

The consultation document had five options:

  1. Do nothing.
  2. Withdraw the advance assurance service.
  3. Restrict access to the service, e.g.
    • To companies seeking their first investment,
    • By reference to the size of the investment or company,
    • To companies seeking SEIS investment only.
  4. Provide a service for discrete aspects of the rules or a company’s eligibility under a specific rule.
  5. Using standard documents such as shareholder agreements for pre-approval.

The consultation closed on 1 February 2017.

Links

EIS: Enterprise Investment Scheme (freeview)

EIS or SEIS: advanced assurance from HMRC

SEIS: Seed Enterprise Investment Scheme

Social Investment Tax Relief

External link

HMRC consultation: Tax-advantaged venture capital schemes - streamlining the advance assurance service 

 

Consultation questions

Question 1. In what context are you responding to this consultation; e.g. investor, investee company, fund manager, industry body representative.

Question 2. Which tax-advantaged scheme or schemes have you used?

Question 3. What would be the impact of increasing response times, including any increase in costs and / or administrative burdens?

Question 4. What would be the impact of withdrawing the advance assurance service?

Question 5. How could the advance assurance service be changed to focus on cases where there is greatest uncertainty? What would be the impact of such changes?

Question 6. In what way could the advance assurance service be limited to discrete aspects of the rules? Please provide details of the impact on your business, particularly any increase in costs and / or administrative burdens.

Question 7. How would a standard set of approved documents assist you? Would you be prepared to cooperate in devising a standard set of documents? Please provide details of any savings in costs and / or administrative burdens from using standard documents.

Question 8. Do you have any other suggestions to improve our advance assurance service?

 

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