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FundingUpdated 2026-02-12

What records do I need to keep for SEIS/EIS?

Quick Answer

Companies must keep records of share issues, how investment funds are spent, compliance with qualifying conditions, employee numbers, gross assets, and trading activity. Investors must keep their SEIS3/EIS3 certificates and records of when shares were acquired and disposed of.

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Detailed Explanation

Record-keeping requirements for SEIS/EIS

Both the company raising investment and the investors claiming tax relief have record-keeping obligations. Poor records are one of the most common reasons for HMRC enquiries and relief being denied.

Records the company must keep

1. Share issue records

Dates of share issues, number of shares issued, price per share, names and addresses of all investors, share certificates issued, board minutes authorising the share issue.

2. Use of funds

Detailed records of how the SEIS/EIS money was spent, categorised by qualifying business activity. This is critical for the SEIS 70% spend rule and for demonstrating the money was used for the qualifying trade.

3. Qualifying conditions

Evidence that the company meets all conditions throughout the qualifying period (3 years from share issue). This includes employee headcount records, gross asset calculations before and after each share issue, evidence of qualifying trade, and UK permanent establishment.

4. Advance assurance correspondence

All correspondence with HMRC regarding advance assurance applications and responses.

5. Compliance statements

Copies of SEIS1/EIS1 compliance statements submitted to HMRC and the resulting SEIS3/EIS3 certificates issued to investors.

6. Annual monitoring

Records showing the company continued to meet conditions each year, including filed accounts, tax returns, and any changes to the business.

Records investors must keep

1. SEIS3/EIS3 certificates

The compliance certificates received from the company. These are essential for claiming tax relief on your Self Assessment return.

2. Investment details

Date of investment, amount invested, number of shares received, price per share.

3. Tax relief claims

Copies of Self Assessment returns showing the SEIS/EIS relief claimed.

4. Disposal records

If and when shares are sold, the date and amount received. This is needed for CGT calculations.

5. Carry-back elections

If you carried relief back to a previous tax year, keep records of the election.

How long to keep records

HMRC can enquire into SEIS/EIS claims for up to 6 years after the end of the tax year in which the relief was claimed (or longer in cases of fraud or negligence). Given the 3-year qualifying period, this means records should be kept for at least 9-10 years from the date of the share issue to be safe.

HMRC compliance checks

HMRC's Small Company Enterprise Centre regularly reviews compliance statements and may request supporting evidence. Common areas of scrutiny include:

  • Whether the trade genuinely qualifies
  • Whether the gross assets test was met
  • Whether the funds were used for the qualifying activity
  • Whether connected person rules were respected
  • Whether the company remained independent throughout the qualifying period

Source: HMRC VCM30130 - Compliance Certificates and Record Keeping

Real-World Examples

Spending Funds on R&D

A software company raised £50,000 through SEIS. They must meticulously document all invoices, contracts, and receipts related to R&D activities, including salaries for R&D staff, software subscriptions, and consultant fees, to prove that at least 70% of the investment was spent on qualifying activities within three years.

Maintaining Employee Numbers

A microbrewery used EIS to raise £150,000. They need to maintain detailed payroll records and employment contracts to demonstrate that they employed fewer than 250 employees throughout the qualifying period, including part-time and temporary staff.

Share Disposal by Investor

An investor claimed EIS relief on £20,000 of shares in a tech startup. They must keep their EIS3 certificate and records of the purchase date. If they dispose of the shares within three years (other than to a spouse/civil partner), they risk losing the tax relief and need to document the disposal date and proceeds.

Common Mistakes to Avoid

  • Failing to retain copies of SEIS3/EIS3 certificates, which are crucial for investors to claim and evidence tax relief.
  • Not tracking the specific use of SEIS/EIS funds, leading to difficulty proving compliance with the 70% qualifying expenditure rule.
  • Neglecting to keep detailed records of employee numbers, especially when employing part-time or temporary staff, which can breach the employee limit condition.
  • Discarding board minutes related to SEIS/EIS share issues, which are essential for demonstrating proper authorisation and compliance.

How long do I need to keep SEIS/EIS records?

Companies must retain SEIS/EIS records for at least seven years from the end of the accounting period in which the investment was made. Investors should keep their records indefinitely, particularly until they dispose of the shares and have claimed all available tax reliefs.

What format should the records be in?

HMRC accepts both paper and electronic records, provided they are legible and properly organized. For electronic records, ensure you have a backup system in place and that the files are easily accessible in case of an HMRC enquiry.

What happens if my company is acquired? Does the acquiring company need the SEIS/EIS records?

Yes, if your company is acquired, the acquiring company will likely need access to the SEIS/EIS records to demonstrate compliance with the scheme rules and ensure the tax reliefs remain valid. This should be part of the due diligence process.

If I have lost my original SEIS3/EIS3 certificate, can I get a replacement?

Yes, contact the company in which you invested. They can request a replacement certificate from HMRC. Keep a copy of the replacement certificate in a safe place.

Practical Tips

  • Create a dedicated SEIS/EIS file (physical or digital) to store all relevant documents, including share issue records, use of funds evidence, and investor certificates.
  • Implement a system to track the use of SEIS/EIS funds, allocating specific invoice numbers and descriptions to ensure clear traceability.
  • Regularly review your SEIS/EIS records to ensure completeness and accuracy, ideally on a quarterly basis, to proactively identify and address any potential issues.
  • Use accounting software to meticulously record share issues and track employee numbers, integrating this data with your overall financial records for seamless compliance.

Related Questions

How do I apply for SEIS/EIS advance assurance?

You apply to HMRC's Small Company Enterprise Centre using the online advance assurance form, providing details of your company, trade, and proposed share issue. HMRC typically responds within 4-6 weeks.

What happens if SEIS/EIS conditions are broken?

If conditions are broken within the 3-year qualifying period, investors lose their tax relief and must repay it to HMRC. The company may also face consequences including being unable to issue further SEIS/EIS-qualifying shares. The clawback affects all investors in that share issue.

What is the 70% spend rule for SEIS?

At least 70% of SEIS money raised must be spent on qualifying business activity before the company can raise further investment under EIS. This ensures SEIS funds are genuinely used for the qualifying trade, not just parked while seeking larger EIS funding.

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