Advance assurance is HMRC's pre-round clearance for an SEIS or EIS raise. For most founders preparing a seed or Series A round, it is the first formal contact with HMRC about the scheme, and investors will almost always ask for it before committing. This walkthrough covers how to confirm you qualify, what to put in the application pack, and what happens after HMRC responds.
What advance assurance is, and what it is not
Advance assurance is HMRC's confirmation that, based on the information you have provided, a proposed share issue is likely to qualify under SEIS or EIS. It is a likelihood indication, not a guarantee of investor relief. If the facts change after assurance is granted, or if the conditions are not fully met at the time of investment, HMRC can still refuse relief when investors come to claim it.
Advance assurance is also not the final step in the process. After the round closes and shares are issued, you must separately file a compliance statement (SEIS1 or EIS1) with HMRC before investors can receive their compliance certificates and claim their income tax relief. The advance assurance is the pre-round clearance; the compliance statement is the post-round filing. Both are required. See the full walkthrough in our guide to SEIS1 and EIS1 compliance statements.
Confirm you qualify first
Before preparing the application, confirm your company meets the qualifying tests for whichever scheme you are applying under. Submitting for assurance on a structure that does not yet qualify wastes time and may produce a negative response that complicates a later, corrected application.
For SEIS, your company must (HMRC SEIS guidance): have gross assets of no more than £350,000 at the time of investment; have fewer than 25 full-time-equivalent employees; be within three years of starting to trade; and be raising no more than £250,000 in total under the scheme.
For EIS, the limits are higher (HMRC EIS guidance): up to £5m per year and £12m over the company's lifetime across the venture-capital schemes (higher for knowledge-intensive companies), with separate gross-asset and company-age tests applying.
Not sure which scheme fits your stage? Our guide to SEIS versus EIS sets out the decision framework, and the SEIS company checklist walks through each qualifying condition in detail.
Ready to apply? Pre-submission checklist
| Condition | Scheme | Source |
|---|---|---|
| Gross assets do not exceed £350,000 | SEIS | SEIS guidance |
| Fewer than 25 full-time-equivalent employees | SEIS | SEIS guidance |
| Within three years of starting to trade | SEIS | SEIS guidance |
| Total SEIS raise will not exceed £250,000 | SEIS | SEIS guidance |
| Annual raise within £5m / lifetime within £12m across VC schemes | EIS | EIS guidance |
| Qualifying trade identified (not an excluded activity) | Both | Advance assurance guidance |
| Prospective investors identified | Both | Advance assurance guidance |
What HMRC wants in the application
The HMRC advance assurance guidance describes the application as a pack of supporting information rather than a single form. The contents are assessed qualitatively: HMRC is checking that the proposed investment is likely to satisfy the conditions of the relevant scheme. The pack should give HMRC enough information to make that assessment without needing to ask follow-up questions, because every follow-up adds time.
| Document / item | Why HMRC wants it | Common gap |
|---|---|---|
| Business plan | To assess whether the company carries on a qualifying trade and is not an excluded activity | Too high-level; does not describe the actual activities in enough operational detail for HMRC to classify the trade |
| Financial forecasts | To assess gross assets, payroll headcount trajectory, and trading stage relative to the scheme limits | Missing or covering only the next 12 months; does not show the position at the point of investment |
| Proposed share structure | To confirm the shares being issued are ordinary shares that are not redeemable or carrying preferential rights that disqualify them | Draft articles or a term sheet not yet showing the precise share class and rights |
| Use of funds | To confirm the investment will be used for the purposes of a qualifying business activity and not to buy assets, pay off debt, or fund excluded activity | Vague deployment description ("working capital and growth") with no breakdown of intended expenditure |
| Prospective investor details | HMRC generally expects the company to identify investors at this stage; confirm the current requirement in the HMRC advance assurance guidance before submitting | Not yet identified; application submitted on a speculative basis before the company has engaged investors |
| Company structure / group structure (if applicable) | To check for disqualifying subsidiaries or parent structures that would take the company outside the scheme | Holding-company or subsidiary arrangements not disclosed |
| Evidence of trading stage | To verify the company is within the allowable period from first trade (SEIS: three years; EIS: company-age tests apply) | No clear documentation of when trading began |
There is no single form number to quote for advance assurance: the HMRC advance assurance guidance describes the current application mechanism and should be followed directly at submission.
The named-investor question
HMRC's advance assurance guidance generally expects the company to identify at least one prospective investor in the application. The precise current requirement can change, so re-verify against the HMRC advance assurance page before you submit rather than relying on a cached version of the guidance.
The practical implication is that founders who apply for advance assurance before they have engaged any investors may find the application returned or stalled. In most cases the right sequence is to have at least a lead investor expressing interest before applying, so you can name them in the pack. This also makes the application more credible: it signals that the raise is imminent rather than speculative.
Step-by-step: preparing and submitting the application
- Confirm qualifying conditions. Work through the checklist above against the current HMRC tests in the SEIS guidance or EIS guidance. Do this before you spend any time on the pack.
- Decide SEIS, EIS, or both. If your raise will fall within SEIS limits now and you expect a larger EIS round later, you can seek assurance for both in one application. State your intention clearly. Our SEIS versus EIS guide covers the decision framework.
- Engage at least one prospective investor. Have investor details ready before compiling the pack (see the named-investor section above).
- Prepare the document pack. Assemble the business plan, financial forecasts, proposed share structure (draft articles or term sheet), use-of-funds breakdown, company structure chart (if you have subsidiaries), and evidence of trading start date. Check each item against the checklist table above before including it.
- Write a covering letter. The covering letter should state clearly: the scheme you are applying under, the amount you intend to raise, the investor(s) you have identified, and a summary of how the company meets the qualifying conditions. This frames the pack for the HMRC case worker.
- Submit to HMRC. Follow the submission method described at the HMRC advance assurance guidance page for current contact details and submission routes, as these change periodically.
- Respond promptly to any HMRC queries. HMRC may write back with questions. A slow response from the company is the most controllable source of additional delay. Assign a single point of contact and respond in full rather than partially.
- Receive advance assurance. HMRC issues a letter confirming the proposed issue is likely to qualify. Share it with prospective investors.
- Close the round. Issue the shares and complete the investment documentation.
- File the compliance statement. After the round closes, file SEIS1 or EIS1 with HMRC so compliance certificates can be issued to investors. See our guide to SEIS1 and EIS1 compliance statements for this step.
What slows or fails an application
Most advance assurance delays come from a small number of recurring problems. Knowing them in advance lets you pre-empt them in the pack rather than responding to HMRC queries after submission.
- Incomplete or forward-only financials. HMRC needs to assess the company's position at the point of investment, not just its future ambitions. If forecasts do not show the gross-asset position and headcount at the time shares will be issued, HMRC cannot complete the assessment.
- Vague use of funds. "Working capital" is insufficient. Break down intended expenditure by category (product development, headcount, infrastructure, sales) so HMRC can confirm the deployment is for qualifying business activity and not for acquiring assets or paying debt.
- Borderline qualifying trade. Some activities sit close to the excluded list (financial services, property development, energy generation under certain structures). If your trade has any edge-case characteristics, address them directly in the covering letter rather than leaving HMRC to draw its own conclusion.
- Share structure issues. Shares with preferential rights, redemption provisions, or fixed-return features can disqualify them from the scheme. Have a solicitor review the proposed share class before submission if you are uncertain.
- Missing investor details. See the named-investor section above. An application submitted without investor information when HMRC expects it will be returned or stalled.
- Group or subsidiary structures not disclosed. If the company has subsidiaries or sits within a holding structure, disclose it fully. HMRC will find it anyway, and omitting it reduces credibility and adds time.
After advance assurance: the round, then the compliance statement
Once advance assurance is granted, you are clear to proceed with the investment round. Advance assurance is not time-unlimited: if there is a significant delay between assurance and the actual investment, or if the company's circumstances change materially, the assurance may no longer reflect HMRC's view. Apply in a realistic timeframe relative to your planned close date.
After shares are issued, the company must file a compliance statement with HMRC (SEIS1 for SEIS rounds, EIS1 for EIS rounds). This is the post-round filing that causes HMRC to issue compliance certificates to individual investors. Without a compliance certificate, an investor cannot claim income tax relief. The compliance statement is therefore not optional and not handled automatically by advance assurance. Full detail is in our guide to SEIS1 and EIS1 compliance statements.
You can estimate the investor relief your round will generate using the SEIS/EIS relief calculator.
Get help with the advance assurance application
Preparing a well-structured advance assurance pack is the single most effective way to reduce HMRC's turnaround time and reduce the risk of a negative response. If you are approaching a fundraise and want the application handled properly, our SEIS/EIS advance assurance service covers eligibility review, pack preparation, submission, and post-assurance compliance through to the SEIS1 or EIS1 filing. Founders planning a round can also find relevant context in our guides for pre-seed founders and funded startups.