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Where Taxpayers and Advisers Meet

SEIS Question (supply services to company I invested in)

Albychu
Posts:3
Joined:Tue Jan 21, 2020 12:25 am
SEIS Question (supply services to company I invested in)

Postby Albychu » Tue Jan 21, 2020 12:31 am

Hey there,

I have a scenario I wanted to run by the smart minds here.

I am in the process of making a £50,000 -> £100,000 into my sisters company, which has SEIS approval.

I am a web developer/designer (but I charge my services through a LTD company), and she wants to use my company to supply her company with services.

My question is, if I invest via SEIS and claim the income tax relief, and she then pays my company (I am the sole employee) to build her the website and manage the technology - will HMRC clawback the relief? And will they see as a ‘connected party’ to my sisters company? Even though I will own then 25% of her company, and it will be my business that is the supplier to her company.

Thanks in advance, and appreciate this may be a little tricky to answer.

Thanks

Alby

jerome.lane
Posts:237
Joined:Mon Aug 12, 2019 8:41 am
Location:Sandhurst, Berkshire
Contact:

Re: SEIS Question (supply services to company I invested in)

Postby jerome.lane » Tue Jan 21, 2020 10:15 am

Brothers and sisters are not counted as associates for SEIS purposes. Reasonable commercial payment for services provided by a company you control should not be construed as an arrangement to allow you to benefit from the SEIS company. Therefore I think you should take comfort that anti avoidance provisions should not apply provided everything is done on an arms length basis.
Jerome Lane
Tax Adviser
Telephone: 07943 005902


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