We are pleased to announce the launch of a new tax advisory service for start-ups and fast growth businesses to help them attract the investment they need to grow.
Ali Kazmi joined the firm as a tax manager to provide advice to entrepreneurs and SME owner managers whilst also working closely with investors and high net worth individuals to advise them on the tax implications of their investments.
His work bridges the gap between the commercial department of the firm and the personal legal services team advising companies and individuals.
The Bristol and London-based law firm launched the new tax service to bring together expertise on both sides of the divide between fast growth start-ups and high net worth investors.
Ali, who joined Gregg Latchams in November 2018 from Battens Solicitors, advises start-ups on the specific tax and legal hurdles which fast growth companies wanting to attract investment need to adhere to.
He also helps investors carry out the necessary due diligence checks on such companies before making major investment decisions.
Start-up companies that want to attract angel investment are strongly encouraged to seek ‘advance assurance’ from HMRC for the Enterprise Investment Scheme (EIS) or the Seed Enterprise Investment Scheme (SEIS). These government schemes offer a range of tax relief to investors purchasing shares in small higher-risk trading companies that are EIS and/or SEIS compliant, creating a major investment incentive and offsetting some of the risk.
Ali works with company owner managers to go through the requirements of the tax legislation to ensure they qualify for advance assurance and retain this status.
Ali said: “The government offers angel investors lots of tax relief if they invest in high risk companies to incentivise them and reduce their risk.
“That is where our expertise brings the two together. We advise the start-ups on getting the advance assurance status and advise the angel investors on effective ways to reduce their tax bills, such as higher risk investment.
“We also help them with their due diligence on potential investment targets. It is very important that companies do not do anything to breach their EIS or SEIS status as this can derail things further down the line, for instance angel investors losing their tax relief.”
The Gregg Latchams team focus on the digital, media and tech industries as well as food and drink as these are all sectors which have a big turnover of start-ups and qualify for EIS and SEIS.
Without EIS or SEIS status companies can still seek out funding from private equity firms but Ali believes angel investors bring a lot more value.
“Angel investors are usually successful and experienced business people and they do not just hand over money, they often take an active interest in the company and can advise and direct when needed and provide a huge amount of added value beyond their financial investment,” he said.
“Companies can often end up with several angel investors all participating in and supporting the business which is a huge help. The angel investors often specialise in particular industry sectors so have a lot of experience to share.”