SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) are among the most powerful tools a UK startup founder has for raising money. They give investors substantial income and capital gains tax reliefs for backing early-stage companies — dramatically reducing their risk and making your round easier to close. This guide explains how the schemes work, who qualifies, and the practical steps to offer SEIS/EIS shares.
SEIS & EIS Key Facts 2026
- SEIS income tax relief: 50% for investors, on up to £200,000/year invested
- SEIS company limit: raise up to £250,000 in total under SEIS
- EIS income tax relief: 30% for investors, on up to £1m/year (£2m knowledge-intensive)
- CGT reliefs: gains on the shares can be tax-free after 3 years
- Advance assurance: HMRC pre-approval reassures investors
- Eligibility: young, small, qualifying trades — some sectors excluded
What are SEIS and EIS?
Both are government schemes that reward individuals for investing in higher-risk early-stage companies by giving them generous tax reliefs. SEIS targets the very earliest seed stage with the most generous reliefs; EIS supports slightly later, larger raises. Companies typically use SEIS first, then EIS. The reliefs go to your investors, but they make your company far easier to fund.
The reliefs investors receive
Under SEIS, investors get 50% income tax relief on investments up to £200,000 a year. Under EIS, they get 30% on up to £1m a year (£2m for knowledge-intensive companies). In both, gains on the shares are free of capital gains tax if held at least three years, and loss relief cushions the downside. This transforms the risk-reward maths for angel investors.
Does your company qualify?
Broadly, the company must be UK-based with a permanent establishment, carrying on a qualifying trade, be relatively young (SEIS: under 3 years trading; EIS: under 7 years typically), small (gross assets and employee limits apply), and independent. Some activities are excluded — including dealing in land, financial services, and certain low-risk trades. SEIS is capped at £250,000 raised in total; EIS allows much more, subject to lifetime limits.
Advance assurance
Before you raise, you can apply to HMRC for advance assurance — a non-binding indication that your company and the proposed shares should qualify. Most angels and syndicates expect to see it before investing, because it removes the risk that the relief later fails. Prepare a business plan, financial forecasts, your articles, and details of the raise.
Issuing SEIS/EIS shares correctly
The shares must be full-risk ordinary shares, paid up in cash, with no preferential rights to your assets — get the terms wrong and the relief is lost. After issuing the shares and trading for the required period, you submit compliance statements (SEIS1/EIS1) to HMRC, who then issue certificates (SEIS3/EIS3) that investors use to claim their relief. Keep your share records meticulous throughout.
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View company packagesFAQ
What is the difference between SEIS and EIS?
SEIS targets the earliest seed stage with the most generous reliefs (50% income tax relief) and a £250,000 company limit. EIS supports slightly later, larger raises with 30% income tax relief and much higher limits. Companies commonly use SEIS first, then move to EIS.
How much tax relief do SEIS and EIS investors get?
SEIS investors receive 50% income tax relief on up to £200,000 invested per year. EIS investors receive 30% on up to £1m per year (£2m for knowledge-intensive companies). Both also offer capital gains tax exemption on the shares if held for at least three years, plus loss relief.
Does my company qualify for SEIS or EIS?
Generally your company must be UK-based, carry on a qualifying trade, be young (under 3 years for SEIS, usually under 7 for EIS), small and independent. Some sectors are excluded. Applying to HMRC for advance assurance confirms likely eligibility before you raise.
What is advance assurance?
Advance assurance is a non-binding indication from HMRC that your company and proposed share issue should qualify for SEIS or EIS. Most investors expect to see it before committing, as it reduces the risk that the tax relief later fails. You apply with a business plan, forecasts and your articles.
What conditions must SEIS/EIS shares meet?
They must be full-risk ordinary shares, paid up in cash, with no preferential rights to the company's assets. After the required trading period you file compliance statements (SEIS1/EIS1) with HMRC, which issues certificates (SEIS3/EIS3) that investors use to claim relief. Getting the share terms wrong forfeits the relief.