Income Tax Act 2007 section 257DJ

The number of employees requirement

Section 257DJ sets out the requirement that a company (and any qualifying subsidiaries) must have fewer than 25 full-time equivalent employees at the time the relevant shares are issued, in order to qualify for Seed Enterprise Investment Scheme (SEIS) relief.

• At the date the relevant shares are issued, the company must have fewer than 25 full-time equivalent employees — if the company is a standalone entity, this applies to it alone; if it is a parent company, the count includes all qualifying subsidiaries
• The full-time equivalent number is calculated by counting all full-time employees and adding a just and reasonable fraction for each part-time employee
• Directors count as employees for the purposes of this requirement
• Employees on maternity, paternity, shared parental or parental bereavement leave, and students on vocational training, are excluded from the count