Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What is the typical timeline for obtaining EIS approval and receiving EIS3 certificates?
EIS approval timelines vary significantly, but members report two distinct phases: getting the initial approval letter is fast, while receiving the EIS3 certificates after investment is taken can be much slower. **Approval letter timeline:** - Can be obtained "pretty sharpish" through your accountants, with some members receiving approval in as little as 2 weeks. **EIS3 certificate timeline (after investment is taken):** - Ranges from 2 weeks to 3 months, though members note timelines are "taking longer than ever apparently." - One member reported previously waiting a couple of months in the past. - Members have experienced anywhere from 2 weeks to 3 months depending on circumstances. **Tactic to potentially speed up the process:** - **Seedrs-style presentation** — one member found quicker HMRC response times when presenting investment data and literature to HMRC in the format Seedrs uses, though they acknowledged correlation may not equal causation. The key takeaway: don't conflate the fast approval letter with the slower certificate issuance; plan for several months between taking investment and receiving your EIS3 certificates.
How does EIS capital gains tax deferral relief work, and how do investors claim it?
EIS capital gains deferral relief allows investors to defer capital gains tax on gains used to fund an EIS investment. The mechanism works differently depending on timing: **Key points:** - Capital gains that you *use to invest* in an EIS can be deferred. If you've already paid CGT on a gain before investing, reclaiming it requires accountant advice on the best approach. - Gains *made on the EIS investment itself* are CGT-free—there's nothing to offset against other gains or losses elsewhere. - Income tax relief (a separate benefit) is claimed in the year of investment or the year before, through the EIS3 certificate form and your tax return. - Capital gains deferral relief is claimed in the same way as income tax relief: via the **EIS3 form** on your tax return. **Recommendations:** - Use a tax agent rather than applying yourself; it's too easy to get wrong. **Seed Legal** was mentioned as a recommended provider. - This is ultimately an accountant question—the specifics of reclaiming already-paid CGT depend on individual circumstances, so confirm with your tax adviser. **Caveat:** Members emphasised this is not DIY territory and stressed the importance of professional support to avoid errors.
Should we use an agent to handle SEIS/EIS applications or can we complete them ourselves?
Members strongly recommend using a specialist agent rather than attempting SEIS/EIS applications in-house. The consensus is that the process is complex enough that doing it wrong is a real risk. **Recommended approach:** - **Seed Legal** — mentioned as a trusted agent for SEIS/EIS applications **Key considerations:** - Multiple members advised "always use an agent — it's too easy to get wrong" - If you're claiming Capital Gains deferral relief (deferring gains from previous CGT-liable transactions into an EIS investment), this adds complexity and makes professional guidance even more important - Relief is claimed through the EIS3 certificate form via your tax return, similar to income tax relief claims - If you've already paid CGT on a gain before deploying it into EIS, your accountant will need to advise on the best reclaim route **Caveat:** While the forms themselves (EIS3 cert) are theoretically completable, the strategic planning around Capital Gains deferral and ensuring compliance makes agent involvement the safer choice.
Can a founder self-issue EIS certificates to investors without paying a third-party service provider?
Yes. Members have successfully self-issued EIS certificates through the HMRC process without paying third-party fees (typically £500+). - **Self-issuing via HMRC** — Two members confirmed they completed the process independently. One received HMRC authority to issue certificates directly to investors after learning the stages and following the process. The other described it as straightforward and not difficult. This approach eliminates the need to pay external firms for certificate issuance.