Unfortunate consequences

Application to withdraw EIS compliance form

The taxpayer was incorporated in June 2013. In August it issued 42 856 £1 shares to two investors and completed forms for the enterprise investment scheme (EIS) and seed enterprise investment scheme (SEIS).

In September 2014 the taxpayer’s accountant filed form EIS1 asking for HMRC’s agreement that the shares qualified for EIS relief. The department authorised the relief in December 2014. The accountant then asked to withdraw the EIS application on the ground that the form had been completed in error; instead the SEIS compliance form should have been submitted.

HMRC refused and the taxpayer appealed.

Referring to the similar case  X-Wind Power (TC5086) the First-tier Tribunal said the combination of the taxpayer issuing shares and submitting the EIS1 on the same day meant that EIS investment took place on 15 August. The requirement for SEIS in ITA 2007 s 257DK that...