Before a company starts fundraising under SEIS or EIS, it can apply to HMRC for Advance Assurance — a statement from HMRC that, based on the information provided, the company and the proposed investment appear to meet the qualifying conditions for the relevant scheme. You will see it referenced in almost every SEIS and EIS investment document: "HMRC Advance Assurance received."
But what does it actually mean? And how much weight should you give it as an investor?
What Advance Assurance is
Advance Assurance is a pre-investment check. The company submits information about its structure, trade, and proposed fundraising to HMRC's Venture Capital Reliefs Team. HMRC reviews the application and — if satisfied — issues a letter stating that the investment appears to qualify for SEIS or EIS relief, subject to the information provided being accurate and the investment proceeding as described.
It is not a guarantee. It is HMRC's view, based on the information submitted, at the time of submission. If the company's plans change after Advance Assurance is received, the assurance may no longer apply.
What it means for you as an investor
Advance Assurance provides meaningful comfort — but it is not a blank cheque. Here is what it does and does not tell you:
- It tells you: HMRC has reviewed the company's structure and proposed raise and believes it meets the qualifying conditions at the time of application.
- It does not tell you: That the investment will definitely qualify. The company must comply with the scheme rules for at least three years after the investment. If it changes its trade, issues the wrong class of shares, or breaches any other condition, HMRC can withdraw the relief retroactively.
- It does not tell you: Anything about the quality of the business, the competence of the team, or whether the investment is likely to return capital.
When Advance Assurance is not required
Advance Assurance is optional — companies are not legally required to obtain it before raising under SEIS or EIS. Many do, because it gives investors confidence and makes fundraising easier. But some companies — particularly those that are clearly eligible and have experienced legal advisers — invest in a qualifying company without it. The absence of Advance Assurance is not automatically a red flag, but you should understand why the company did not seek it.
The SEIS3 and EIS3 compliance statements
After the investment is made and the company has been trading for the required period, HMRC issues a SEIS3 (or EIS3 for EIS) compliance statement. This is the document you actually use to claim your tax relief — you submit it with your Self Assessment return. The SEIS3/EIS3 is the definitive confirmation that the investment qualifies and is the basis on which HMRC accepts your relief claim.
What to check before investing
When reviewing a SEIS or EIS investment opportunity, look for:
- Confirmation that Advance Assurance has been received (and ask to see the letter if it has)
- Legal confirmation that the shares being issued are qualifying ordinary shares
- Confirmation that the company intends to use the investment for qualifying business activities
- Clarity on when the company expects to issue the SEIS3 or EIS3 — typically three to four months after the fundraise closes