Investors who are also employees cannot benefit from SEIS, but existing or new directors in the company are eligible.
Providing the company has <50 employees, is unlisted, has gross assets of no more than £200k, and is carrying on a qualifying trade on a commercial basis, a UK tax-paying investor will be able to:
• Claim an income tax reduction equal to 50% of the money invested (subject to an annual investment limit of £100k);
• Pay no capital gains tax on any profits made from an SEIS investment; and
• Offset a loss against income tax providing they hold the shares for at least 3 years before selling them.
• Claim an income tax reduction equal to 30% of the money invested (subject to an annual investment limit of £1m);
• Defer CGT payments when the gain is reinvested in shares of an EIS qualifying company;
• Pay no capital gains tax on any profits made from an EIS investment; and
• Offset a loss against income tax providing they hold the shares for at least 3 years before selling them.
The shares must be ordinary shares which are paid up in full and in cash when they are issued.
Companies can only raise a maximum of £5 million in aggregate under SEIS.
Businesses have been given more time to prepare for the change to compulsory Payrolling Benefits in Kind. The start date has been moved from April 2026 to April 2027.
What Employers Need to Know
From April 2027, most benefits in kind must be reported under Real Time Information (RTI) and employers will also need to pay Income Tax and Class 1A National Insurance contributions (NICs) during the tax year.
To make this possible, HMRC will expand the number of RTI data fields. These extra fields will hold data that is currently reported in forms P11D and P11D(b).
Some benefits are not yet included in mandatory payrolling. Employment-related loans and accommodation remain outside the rules for now. For these, the P11D and P11D(b) process will continue temporarily, however, employers can choose to payroll them voluntarily.
To payroll benefits voluntarily for the 2026/27 tax year, you must register in advance. For the tax year starting 6 April 2027, registration will be open from November 2026 to 5 April 2027.
How Benefits Will Be Calculated
The taxable value of a benefit in kind will be calculated as follows:
• Take the annual cash equivalent of the benefit.
• Divide it by the number of relevant pay periods for each employee.
• The resulting figure will be liable to Income Tax and Class 1A NICs each pay period.
• Employers must report this figure alongside employee earnings in each period.
If the value of a benefit is not known at the start of the year, employers must use a reasonable estimate.
HMRC’s Further Guidance
HMRC has highlighted specific situations:
• Globally mobile employees within modified PAYE arrangements: HMRC is considering keeping the P11D and P11D(b) processes for these cases.
• Employees and directors receiving no income: Employers will still need to provide details of benefits in kind and expenses via an FPS. Class 1A NICs will be due in the same way as for employees with income. The FPS will show no payments of earnings and no tax paid. Any uncollected tax will be recovered through the P800 reconciliation process, simple assessment, or self assessment.
What Employees Should Expect
For employees, the change means tax on benefits will move into real time. Employers will need to explain this clearly to staff. In the first year of mandation, some employees could face a cash flow impact if they are already paying tax on benefits from a previous year.
Next Steps for Employers
More information is expected from Autumn 2025 onwards. In the meantime, it may be worth considering voluntary payrolling of benefits in 2026/27. This would give businesses a chance to test the system before it becomes compulsory. Advance registration is required for voluntary payrolling.
We are happy to advise on voluntary payrolling or any other steps you need to take to prepare for the change.
The government is extending Right to Work Checks to the gig economy and zero-hours workers. The change will form part of the Border Security, Asylum and Immigration Bill.
Although the Bill is not yet law, businesses should prepare now. The introduction of right to work checks for gig workers and zero-hours staff represents a major shift. Government figures suggest that between 2.5 million and five million additional working arrangements will fall within scope.
What’s Changing
Until now, right to work checks have applied to traditional employment contracts only. Flexible arrangements were not covered. The new rules will affect sectors that rely heavily on non-traditional working models, such as:
• Construction
• Food delivery
• Beauty salons
• Courier services
Some companies, including Deliveroo, already run right to work checks and other verification procedures.
Why the Change Matters
Right to work checks are carried out by employers. They prove a person’s immigration status and confirm they can legally work in the UK.
“To strengthen the entire immigration system, restoring tough enforcement of the rules and undermine people smugglers using the false promise of jobs for migrants.”
Penalties for Non-Compliance
The new rules are backed by strict enforcement. Businesses that fail to comply could face:
• Civil penalties of up to £60,000 per worker
• Business closures
• Director disqualification
• Prison sentences of up to five years for knowingly employing someone without the right to work
Beyond legal risks, reputational damage can also be severe.
Preparing for New Responsibilities
Employment legislation is already complex. A recent Home Office survey showed that 80% of employers got at least one question wrong when asked about right to work checks. The new rules will add yet another compliance layer for businesses to manage.
We are here to help you prepare. Please contact us if you have any questions about right to work checks or your responsibilities under the upcoming rules.