I've received a letter in response to an AA application stating that, as of 2nd Jan, things have changed, as a result of a recent consultation. It states:
As a result of a consultation document on advanced assurance, out policy has changed and as of 2nd January 2018 we can no longer consider speculative advance assurance applications. There is now a requirement to include the name and address of the potential investors who have shown an interest in the company.
Full details of this change can be found at VCM 14030 / 35030.
It is annoying as this application was posted before Christmas and should have arrived before Christmas, yet they reply on the 3rd Jan saying the new changes are now in effect.
Im convinced they say on the application so that it overran 2nd Jan.
Did anybody else know about this change? I didn't see anything in the professional press.
Related resources
Replies (5)
Please login or register to join the discussion.
I was just about to post this exact same query - I had a reply today from HMRC saying the same thing re SEIS.
From my perspective, HMRC's requirement makes no sense. The very reason nearly all of my client's obtain advance assurance is so that they can then approach potential investors with the advance assurance - it makes the investment attractive.
What about startups that are crowdfunding? What do they say?
This is total nonsense from HMRC. Who would truly go to the trouble of getting AA for a company they intend not to raise funds for. HMRC seem to have deliberately created a chicken and egg scenario.
I didn't see any updates to the guides or rules for this before Christmas so if anyone has a link for that I would be grateful.
https://www.gov.uk/government/consultations/tax-advantaged-venture-capit...
I see both sides of this argument. I agree nobody’s going to make an AA application if they don’t intend getting investment,but I’ve certainly had more than one client who’s been, shall we say, overly optimistic about their attractiveness to investors. I have found myself redoing an AA application from scratch because once the investors have done their due dil, they’ve wanted a bespoke share class, rewritten Arts and an SHA with robust warranties etc. Original AA pretty much not worth the paper it was written on, and no use to the investors. So I can see if HMRC are getting a lot of that, they might feel it’s a waste of their time. Client certainly wasn’t chuffed at having to pay me twice :)
Interesting, it wasn't just myself who was unaware of this change of policy then.
I did feel a tad silly, as clients expect us to know these things, however this one totally crept in.
Yup unfortunately because the AA process is informal and non-statutory it slipped under the radar as the detail (which came via a published consultation response) came out when we were all puzzling through the November Budget stuff. I'll be writing an article for advisers on the changes shortly.