SEIS and EIS in one paragraph

The Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) give individual UK investors a basket of tax reliefs when they invest in qualifying small companies — up to 50% income tax relief (SEIS) or 30% (EIS) of the amount invested, plus capital gains advantages and loss relief if things go wrong. They're aimed at early-stage, higher-risk companies and they make a meaningful difference to investors' after-tax returns.

Why founders should care

Because most UK angel investors and seed-stage VCs will ask, "Is the round SEIS/EIS eligible?" before reading any further. Eligible rounds are easier to fill and often raise at more founder-friendly terms.

Qualifying conditions (high level)

Your company generally needs to:

  • Be a UK company carrying on a qualifying trade (some sectors are excluded)
  • Be young enough — SEIS is tightest, EIS has more headroom
  • Be small enough by gross assets and employees
  • Have a permanent establishment in the UK
  • Not be controlled by another company

The investor also has to meet conditions — mainly that they're an individual UK taxpayer and not "connected" to the company.

Specifics change over time and the detail matters — this is one to do with an accountant who's done it before.

Advance assurance

Before you take investment, you can ask HMRC for advance assurance — a written indication that the company and the proposed shares look eligible. Investors usually want to see this before wiring money. The application is straightforward but the supporting information (business plan, financials, share structure) needs to be tidy.

Get advance assurance early

Founders who try to do SEIS/EIS retrospectively often run into avoidable issues. Apply for assurance before the round closes, not after.

Compliance after the investment

Once you've taken SEIS or EIS money, the company has to follow various rules for at least three years — mostly about not buying back shares, not changing the company structure improperly, and continuing to qualify. You also need to file SEIS/EIS compliance statements so investors can claim their relief. Don't let this slip — the investors are relying on you.

A worked example for investors

An investor puts £50,000 into a qualifying EIS round.

  • Up to 30% (£15,000) income tax relief — reducing their effective cost to £35,000.
  • If they sell the shares at a gain after 3 years, that gain is potentially CGT-free.
  • If the company fails, they can claim loss relief on the at-risk portion against income or gains.

The combined effect is a very different risk profile to non-EIS investing — which is why SEIS/EIS rounds attract investors who wouldn't otherwise back early-stage UK companies.

Founder checklist

  1. Confirm your trade qualifies — some sectors are excluded.
  2. Get your cap table tidy before you raise.
  3. Apply for advance assurance with a clear pitch deck and forecast.
  4. Issue ordinary shares (the scheme requires this).
  5. File compliance statements after the round so investors can claim their relief.
  6. Build in follow-on — if you might raise more later, plan SEIS first, then EIS.

Frequently asked questions

Often yes — SEIS is used up first to the cap, then EIS for the balance. The order matters; your accountant manages it.

No — founders are typically "connected" to the company and don't qualify for the personal reliefs. The scheme is for external investors.

If the company fails within the holding period, investors can usually still claim loss relief on the at-risk amount. It's one of the reasons SEIS/EIS investing is so attractive.