Advance assurance is HMRC’s opinion, given to a company before it issues shares, that the planned investment looks likely to qualify for SEIS or EIS. It is useful evidence that a company has engaged with the rules, but it is not a guarantee of tax relief, it is not an endorsement of the business, and HMRC can be released from it if the facts, the terms or the law change.
HMRC’s Venture Capital Schemes Manual describes it as “a non-statutory, discretionary, service” in which HMRC “may offer an opinion”. No company has to obtain it before issuing shares, and a company that has already issued the shares cannot apply.
What HMRC looks at
The company applies on HMRC’s form with the amount it plans to raise, its business plan and forecasts, its latest accounts if it has any, its articles of association, any agreements with shareholders, the draft documents it will show investors, its register of members and a breakdown of planned spending (HMRC guidance). The business plan should be the one shown to independent investors, not a document written for HMRC (VCM60220).
A company that has never used the schemes must name its prospective investors, with their addresses and intended amounts, or show that a fund manager or crowdfunding platform has agreed it may be a viable investment. Failing to disclose an intermediary invalidates the assurance (VCM60230).
The weak point is verification. HMRC “does not generally check the accuracy or completeness of the information” and will generally accept what the company says, apart from obvious errors (VCM60220). An assurance based on limited disclosure is not valid, and HMRC says investors “cannot rely upon” it.
What it does not tell you
- Whether you will get relief. An assurance “is not an assurance as to the availability of tax reliefs to any particular investor”, because investors must meet their own conditions (VCM60010). For SEIS, you and your associates must not hold more than 30% of the company, and you must not be an employee, although directors can qualify (HMRC).
- Whether the business is any good. HMRC says an assurance should not be read as “a general endorsement by HMRC or an indication of potential investment performance”, and that investors should do their own due diligence.
- Whether the facts hold on the day of issue. The SEIS company tests apply when the shares are issued: gross assets of no more than £350,000, fewer than 25 full-time equivalent employees, a trade carried on for no more than three years, and no EIS or venture capital trust money (HMRC). An opinion given months earlier cannot confirm those.
- How long it lasts. HMRC’s guidance gives no validity period. What matters is whether the share issue matches what was disclosed.
When HMRC is not bound
HMRC lists the circumstances in which it may no longer be bound by an assurance (VCM60240):
- the nature or terms of the deal change in a way that has a material impact;
- the information the assurance relied on has been superseded;
- the company did not make full disclosure, or gave incorrect, incomplete or misleading information;
- later transactions show the substance of the company’s activities differs from the application;
- a court or Upper Tribunal changes the interpretation of the law before the investment or before the company files its SEIS1;
- the law on the qualifying conditions changes, for example through a new Finance Act.
When the company submits its compliance statement it must report any changes since the application, otherwise “the assurance will no longer apply” (HMRC guidance). If HMRC later finds the company was not eligible because it failed to disclose relevant information, the compliance statement will be rejected or relief already given will be withdrawn (VCM60220).
From assurance to relief
Relief depends on what happens after the shares are issued, not before. The sequence below comes from HMRC’s SEIS guidance for companies and its guidance for investors.
| Step | Who acts | What happens |
|---|---|---|
| 1. Advance assurance (optional) | Company | HMRC may give an opinion that the planned share issue looks likely to qualify |
| 2. Share issue | Company and investors | Shares must be paid for in full, in cash, when they are issued |
| 3. Compliance statement (SEIS1) | Company | Filed only after four months of trading in the new trade or once 70% of the money is spent; one statement per share issue |
| 4. Authorisation (SEIS2) | HMRC | If satisfied, HMRC issues form SEIS2 with a unique investment reference, authorising certificates for the investors listed |
| 5. Certificate (SEIS3) | Company | Issued to each investor listed on the SEIS1 |
| 6. Claim | Investor | Through Self Assessment or a tax code change, up to five years after 31 January following the tax year of investment |
| 7. Three-year period | Company and investor | Both must keep to the rules, or relief is withheld or withdrawn |
The SEIS3 matters more than the assurance. Investors must have the certificate before claiming, and HMRC says even the certificate “only indicates that HMRC is satisfied that the company has met the scheme requirements”; the investor conditions are a separate test.
What can still go wrong after you invest
Most of the tax risk sits after the assurance. HMRC can reject the SEIS1 if the facts at issue do not fit the rules. After that, relief can be lost during the three-year period if (HMRC):
- you sell some or all of the shares;
- the company fails to meet the scheme conditions, for example by not spending the money on its qualifying trade within three years of the share issue;
- you develop a connection with the company;
- you receive money or other assets from the company.
Investors must tell HMRC within 60 days if any of these happens. None of this touches the larger risk, which is that the business fails. Advance assurance is about tax status, not survival; for what relief does to a loss, see our guide to SEIS loss relief.
The numbers
Most applications are approved. HMRC received 4,085 SEIS advance assurance applications in 2025 to 2026; by March 2026, 3,090 (76%) had been approved and 485 rejected, with 510 pending or not pursued. Of the 3,285 applications in 2024 to 2025, 2,785 (85%) were eventually approved (HMRC statistics and tables, 21 May 2026).
Neither side of that ledger is conclusive. HMRC says a refusal “does not indicate that HMRC has already reached a view” and that it may prefer to examine the facts at the compliance statement stage (VCM60250). An approval, equally, does not mean the round went ahead. Our SEIS statistics analysis has the full series.
What to ask the company to show you
HMRC will not discuss a company with potential investors: its manual says enquiries must go to the company, not HMRC, because of its duty of confidentiality (VCM60010). The evidence has to come from the company.
- HMRC’s assurance statement itself, with its date, the scheme and the share issue it covers (HMRC sends the company a statement it can show investors).
- What has changed since the application. Ask whether the round size, valuation, share rights, use of funds or intermediaries differ from what HMRC was shown. Material changes can release HMRC from its opinion.
- The articles and any shareholder or investment agreement, to check the shares are ordinary shares with no preferential right to assets on a winding up, no right to be redeemed and no arrangement protecting investors from risk (HMRC).
- The cap table and funding history, to confirm no EIS or venture capital trust money has been taken and that SEIS money stays within £250,000, a limit that also counts other de minimis state aid received in the three years up to the investment.
- Any advance subscription agreement. HMRC expects it to be non-refundable, interest-free and impossible to vary, cancel or assign, with a longstop date generally no more than six months away (VCM33025). Our explainer on convertible loan notes and ASAs covers the detail.
- The compliance timetable: when the company expects to be able to file its SEIS1, who will file it, and when certificates should follow.
- Your own position: your stake with associates, and any employment with the company.
Our sister title SEIS Investments covers the process from the founder’s side, including how advance assurance works and an advance assurance document checklist, plus a set of investor due diligence questions. Our SEIS due diligence guide goes further on the business itself, and SEIS for investors covers the reliefs.
