EIS/SEIS Relief Clawback

John_123

Hi there,

I am small investor in early stage companies that benefit from EIS and SEIS relief. Sometimes the relief gets withdrawn /clawed back on account of the company being wound up before the mandatory 3 yr holding period (there are also other situations where the relief is withdrawn). In this situation does anyone know how the investor pays the relief back to HMRC? Online Self Assesment enables EIS/SEIS relief to be claimed at the start of the investment but I can't find where/how it's paid back to HMRC on its withdrawal.

I appreciate in the case of a wind up of a EIS/SEIS company then Loss Relief also maybe due, however claiming this via Self Assessment seems straight forward.

Any help would be much appreciated.

Thanks

Reaper

I'm no expert but my understanding is you do not lose tax relief if the company fails within 3 years. The tax relief is there to encourage investment in high risk firms and it would not achieve that if clawback occurred.

If you have lost the tax relief for some reason (eg selling up within 3 years) then from a Google it looks like you don't do it through self assessment, instead it is done like this:
https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm15140

John_123

Reaper, thank you so much for the link. I now have an idea where to start but I have to say I'm not sure still how to do this.

From the suggested link the tax payer needs to make a Special Assesment as copied below:

"From 1 November 2010, special assessments must be made manually using SEES 310(Z) Special Assessment/Determination located in SEES Forms and Letters under the SAFE category."

After a bit of googling this remains baffling. Does anyone know about SEES forms and the SAFE category? It looks like something for a company tax return rather than for individuals i.e. something complicated for a simple rebate.

BTW I wrote to HMRC who said a clawback of the relief was due but didn't enlighten me how it could be achieved. I would love to be able to just write a cheque and be done with it.

Any experience in this gratefully appreciated.

Thanks

Dazed_and_confused

That looks to me like internal guidance for HMRC staff not something you can do yourself.

Other than writing to them again you have probably done all you need to, the onus is surely on them to send you an assessment?

John_123

Thank you Reaper and Dazed. By way of update on this, after explaining the situation to HMRC and outlining the calculations (via several correspondence) they did send a request for payment for the withdrawn Eis/seis relief.

This leaves me now having to claim loss relief against income for the 16-17 year filed in Jan. I.e. I want to reduce my income tax liability using relief for allowable capital loss -relief allowable for Eis/seis losses. Does anyone know how this is done via hmrc self assessment? I assume I find the 16-17 filing on the hmrc website and enter the correct amounts in certain boxs which would then create a credit in my hmrc account. However which boxes?

There seems to be plenty on the web for calculating the relief (which I have done), less on how to actually obtain it via hmrc self assessment.

Any thoughts appreciated.

Thanks in advance.

Reaper

Sorry I haven't done it (well... only a very long time ago before Self Assessment came in).

If you don't get the answer here you can always try the Tax forum
https://forums.moneysavingexpert.com/forumdisplay.php?f=22