Wrong form submitted to claim seed enterprise investment relief

The taxpayer was a fashion technology start-up company. To raise funds the founders wished to issue shares that qualified for the seed enterprise investment scheme (SEIS).

They applied for advance assurance from HMRC that the shares would qualify for SEIS. HMRC replied authorising the company to issue certificates to investors under the enterprise investment scheme instead. Realising that they had erroneously completed the similar EIS1 form they emailed HMRC immediately saying they had made a mistake and asking for authority to issue SEIS certificates. HMRC refused. This was on the basis that because a form EIS1 had been submitted and shares issued an investment had already been made under the EIS so that the company no longer qualified under the SEIS.

The taxpayer appealed.

The First-tier Tribunal said viewed realistically it could not be said there had been any prior investment under the EIS. The only...