The first thing to note is that the process is slightly different for (a) those who are employed and pay tax via PAYE and do not regularly complete a tax return, and (b) those who are self-employed and/or report their income on a tax return every year and pay tax on account. Those with a tax return have more options.
If you are employed and pay tax under PAYE
- The relief is normally due for the tax year in which the shares were issued, in OLH’s case the year ending 5th April 2014. However you can set all or part of the tax relief against your tax liability for 2012/13 or a future year if you wish. This would be pertinent if, for example, you were currently unemployed or your tax liability for the current year was less than the tax relief you’re entitled to – which is 50% of your shareholding.
- If you receive a tax return, you can claim your tax relief on that when you get it: for the details, see If you’re self-employed… below
- If you pay tax under PAYE you can claim relief for the current year at any point:
- Complete the form on pages 3 and 4 of your SEIS3 (the HMRC certificate you have received from OLH). The details that you need about the shareholding, date of issue, the company (Osney Lock Hydro) and the HMRC office and reference number are on the printed sheet that is stapled to the front of the form.
- Tear off page 3/4 and send it to your HMRC office (if you haven’t had anything from them recently and don’t know which office it is you may find their details plus your tax reference number on your payslip and certainly on the P60 form given you by your employer each year)
- If you are sent a tax return after the end of the year you will also have to enter details of your claim on the tax return
- If you want to claim relief for a previous year for which you either didn’t receive a tax return or you did receive a tax return and have already submitted it, you need to complete pages 3 and 4 and send them to your tax office. You will see on p3 the section headed Claim to SEIS income tax relief gives you space to enter the amount on which you’re claiming relief for the current year and a separate space for a claim for the previous year.
If you are self-employed or get a regular tax return or don’t pay tax under PAYE
- The relief is normally due for the tax year in which the shares were issued, ie the year ending 5th April 2014. However you can set all or part of the tax relief against your tax liability for 2012/13, if you wish.
- You need to claim your relief on a tax return
- You don’t need to fill in pages 3 and 4 of the SEIS3 form that you’ve been sent by OLH
- You do need to keep the form handy so that on your tax return you can provide the details supplied on p1 (the printed sheet that’s attached to the front of the SEIS3)
- In the appropriate box on the tax return enter the total subscription (ie your shareholding) on which you’re claiming relief. On the 2012/13 tax return the box was no. 2 on p. Ai2 (Additional information 2) under Other Tax Reliefs, and asked for Subscriptions for shares under the Seed Enterprise Investment Scheme (box 11)
- In the large box reserved for Additional Information at the end of the tax return (p. Ai4, no.19) enter the following details from the p1 attachment of the SEIS3 form :
- the name of the company invested in
- the amount of subscription qualifying for relief (ie your shareholding)
- the date of issue of the shares
- the name and reference number of the HMRC office authorising the issue of the certificate
It may also be possible for you to claim your tax relief in a future year, after 2014/15. We suggest you consult an accountant for any circumstances different from what’s outlined above.