Over the weekend I did something to invest in my financial future and it was surprisingly easy.

As a freelance journalist, I’m a sole trader, so every time I do any work, I’m building a nice, not-so-little income tax liability. I’m also not getting any younger and at 54, keen to continue building a nest egg for my retirement.

Part of the solution for me, alongside pension contributions and putting money aside to pay my tax bill, is investing in high potential UK companies through the Seed Enterprise Investment Scheme (SEIS).

The reasons, for me, are complete no-brainers:

• I can claim income tax relief of 50% of the amount I’ve invested
• There’s a good chance I’ll benefit from accelerated growth, although I will need to leave my money invested for a minimum of three years and maybe up to ten.

On top of them, selecting the Haatch SEIS fund was a pretty easy decision:

• They apply a single, 10% upfront fee, a substantial saving on the market average of 24% over a seven-year period, (MICAP, May 2024).
• They have a record of substantial uplifts and maturing companies attracting lots of positive attention and progressing to exits. This includes Trumpet which last week announced a very large Seed round of over $6m, a company which Haatch backed from their SEIS Fund 2 years ago

Making the investment only took a few minutes – I just had to set up an online account with my personal details. But you do need to fully take in the risk warnings – they are real as new young companies can really struggle, so you need to properly consider how much money you’re risking.

I had to answer some simple, multi-choice questions to make sure I am fully aware of the level of risk. But I’m also considering the income tax relief available as well as loss relief, which combined, can mean that over 70% of the funds I’m investing will be safe, even if one or more of the nine to fifteen SEIS-qualifying companies that Haatch invests my money into, fails completely.

Haatch also applies a 24-hour cooling off period, so there was plenty of time before I had to commit any money. Once the cooling off period ended, I received the bank account details for the investment and I sent my £4,000 to it using my own online banking app.

And hey presto – my investment was made!

A confirmation email from Haatch tells me my 10% upfront fees total £400, leaving £3,600 for investment. That means I can claim £1,800 against my income tax bill for this tax year or that I can carry back to 2023/24.

I know that the current SEIS Fund I’ve invested in will close at the end of August, and my funds will be deployed before 31 December 2024. I will have a portfolio of 9-15 companies and I must hold those shares for a minimum of three years from dates of investment in them in order to hold on to the tax reliefs I claim.

If you’re interested in learning more about the Haatch SEIS Fund, you can request the Haatch IM on their website here.

Post written by Lisa Best, content and distribution specialist in financial services and tax-efficient investments.