SEIS / EIS changes announced by the Chancellor 23rd Sept 22

The Chancellor, Kwasi Kwarteng, today (23 September 2022) announced a set of sweeping changes to SEIS and strongly hinted at pushing out the EIS sunset clause, which currently means the EIS scheme is withdrawn from 6 April 2025 if no action is taken.

The changes, which are copy and paste from the The Growth Plan, are as follows:

First, let's look at the changes regarding SEIS - very firm commitments have been announced:

From April 2023, companies will be able to raise up to £250,000 of SEIS investment, a two-thirds increase. To enable more companies to use SEIS, the gross asset limit will be increased to £350,000 and the age limit from 2 to 3 years. To support these increases, the annual investor limit will be doubled to £200,000. These changes will help over 2,000 companies a year that use the scheme to grow.

The news on EIS remains less firm, but seems positive and surely indicates that EIS won’t be allowed to lapse:

The government remains supportive of the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) and sees the value of extending them in the future.

A few obvious questions spring to mind as a result of these changes:

• What happens if you've raised £150k SEIS and £50k EIS. The current rules preclude raising SEIS after you've raised EIS funds - so will those businesses be excluded from benefiting from the new £100k increased SEIS allowance?
• How will a company that has been trading for 2 years at, say, 1st Jan 2023 be treated - will they be able to make use of SEIS from April 23? This would strongly disincentivise companies from raising EIS in Q1 2023 if they are between 2 and 3 years trading.

This article will be updated as more details on the changes are published.