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Arrangements for issue of shares were disqualifying so authority to issue SEIS compliance certificates refused

By Mark McLaughlin, June 2024

Arrangements for the issue of shares to investors were ‘disqualifying arrangements’ for SEIS purposes so the appellant’s appeal against HMRC’s refusal to authorise the issue of SEIS compliance certificates was dismissed by the Upper Tribunal. 

In April 2019, HM Revenue and Customs (HMRC) sent to the appellant a decision to refuse authorisation to issue seed enterprise investment scheme (SEIS) compliance certificates in relation to issues of ‘B’ ordinary shares made by the appellant between 19 March 2018 and 5 April 2018 (inclusive). The appellant appealed. 

HMRC’s initial refusal to authorise the issue of compliance certificates was on the grounds that the appellant failed the ‘risk-to-capital condition’ because the appellant did not have ‘objectives to grow and develop its trade in the long term’ (ITA 2007, s 257AAA(1)(a)). HMRC subsequently advanced two further reasons for

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