Income Tax Act 2007 section 257S

Assessments for the withdrawal or reduction of SI relief

Section 257S explains how HMRC must go about withdrawing or reducing Seed Enterprise Investment Scheme (SI) relief that has already been given to an investor.

• Where SI relief has been obtained and subsequently needs to be withdrawn or reduced, HMRC must do so by making a formal income tax assessment.
• The assessment is made for the tax year in which the SI relief was originally obtained.
• The rules for when withdrawal or reduction applies are set out in Chapter 7 of the legislation.
• This ensures there is a proper legal mechanism for HMRC to recover relief that is no longer due, rather than simply adjusting figures informally.