I have been involved with SEIS advance assurance a handful of times, so feel fairly comfortable with the various conditions for a company and investor. While I appreciate it is normal to obtain advance assurance, I understand there is no requirement to do so.
I have a potential new (and previously unrepresented) client who had heard of SEIS and gung ho raised finance and issued shares (although, somewhat typical of such clients, the record keeping is not great- especially with regard to the filing at Companies House). The company should qualify for SEIS. The investor should qualify for relief. But they have naturally not done advanced assurance and therefore there is no SEIS2 or SEIS3s.
At a previous firm, the tax partner would not allow us to claim SEIS relief for investors without an SEIS3 form. My first question is was that particular partner being prudent to protect against HMRC coming back and making enquiries? I assume you can still claim tax relief without an SEIS3 but it is higher risk.
I assume it is still best practice to obtain advance assurance even after the event? That said, my most recent experience of the HMRC's Venture Capital Relief Team found us waiting months at a time for a response. I assume their resources have been stretched due to COVID.
Regarding the lack of paperwork, will going back and correcting the filings and ensuring the necessary is paperwork is in place, which would reflect the understanding of both the company and investor at the time, undermine or jeopardise the SEIS status? For example, could HMRC reasonably argue that the investment without the necessary filings at CH means that this was a loan until the shares are formally issued (therefore meaning the shares were converted and not issed by way of cash, which would mean SEIS is prevented)? I know back-dating share issues is not possible, but if it is to formalise something agreed at the time, would this still be "back-dating"?
Any thoughts or experience would be much appreciated.