Not many people know, but last year HR Revenue & Customs launched the Seed Enterprise Investment Scheme (SEIS) to promote business innovation by offering a range of generous tax incentives for angel investors. 

Now, though, tax officials are upping their game, and trying to increase awareness of the scheme by allowing investors to “carry back” – a process that allows investors to avoid paying CGT on money into companies before April 2014 – 12 months longer than previously thought.

Speaking to the telegraph, Dale Murray, an angel investor himself, said: “It’s unbelievable – the Government is effectively underwriting your investment. Even very enterprising countries like the US and Israel have nothing that compares with SEIS.”

The scheme works by offering 50pc income tax relief on investments worth up to £100,000.

Combined with the new “carry back” limit, this effectively means that tax breaks of up to 78pc are available until next year on qualifying investments. At the same time, loss relief measures allow investors to write off more than 100pc of money given to start-ups that failed.

Described by Lord Young, the Government’s enterprise adviser as “ridiculously generous”, the scheme could potentially lead to the best start-ups receiving the funding necessary to support their quick and steep growth.

So why haven’t we heard of SEIS?

Well, David Watt, co-founder of venture capital firm Oxford Capital, argues that the current investment limit of £150,000 is too small, both for the investor and the start-up, which may have prevented take-up.

Hopefully the new extended “carry back” limit will improve the situation. But, if the current mismatch between investors and companies persists, the scheme may ultimately go to waste.

Do you think the Government is doing enough to promote SEIS? What else could they be doing to raise awareness? Email us your thoughts.