If you are raising money from UK angel investors, expect to be asked whether the round qualifies for SEIS or EIS. Both schemes give investors Income Tax relief for buying new shares in a small, higher-risk company. The relief goes to the investor, but getting it depends heavily on what the company does: how it raises, when it issues shares, and what it files afterwards.
This guide is written for founders. It sets out the current limits, including the EIS changes that took effect on 6 April 2026, the order you have to use the schemes in, and the paperwork that turns an investment into a tax relief claim. It is general information, not advice for your company or your investors.
What is the difference between SEIS and EIS?
SEIS, the Seed Enterprise Investment Scheme, is for very young, very small companies. EIS, the Enterprise Investment Scheme, covers a much larger band of growing companies and much larger rounds. The headline figures, from HMRC’s investor, SEIS, EIS and knowledge-intensive company guidance:
| SEIS | EIS | |
|---|---|---|
| Income Tax relief for the investor | 50% | 30% |
| Most an investor can put in each tax year | £200,000 | £1 million, or £2 million if the extra is in knowledge-intensive companies |
| Maximum the company can raise | £250,000 in its lifetime | £10 million in any 12 months and £24 million in its lifetime (knowledge-intensive: £20 million and £40 million) |
| Company size when shares are issued | Gross assets no more than £350,000, fewer than 25 full-time equivalent employees | Gross assets no more than £30 million before and £35 million after the issue, fewer than 250 full-time equivalent employees (500 if knowledge-intensive) |
| Company age | Trade no more than 3 years old | Usually within 7 years of first commercial sale (10 years if knowledge-intensive) |
| Minimum holding period | 3 years | 3 years |
The EIS company limits and gross assets tests in that table are the new figures from 6 April 2026. Before then the gross assets tests were £15 million and £16 million, so some older guides online are now out of date. A few Northern Ireland companies covered by specific rules keep the previous limits.
Both schemes also carry Capital Gains Tax benefits for investors. SEIS offers reinvestment relief on part of a gain reinvested, and EIS lets investors defer a gain by reinvesting it. Shares held for at least three years, with the Income Tax relief intact, are normally free of Capital Gains Tax when sold, according to HMRC’s investor guidance. If shares are sold at a loss, investors can set the loss, less the Income Tax relief already given, against their income. Selling within three years, or the company breaking the scheme conditions in that time, means the relief is lost.
Which scheme do you use first?
SEIS first, if you are going to use it at all. HMRC’s SEIS guidance says a company cannot use SEIS once it has received investment under EIS or from a venture capital trust. The old rule that 70% of the SEIS money had to be spent before an EIS raise was repealed in 2015, but HMRC’s manual still says EIS shares must be issued at least one day after any SEIS shares, never on the same day.
In practice that makes the sequence a planning decision, not a filing detail. A founder who issues EIS shares to one early angel and then tries to run a £250,000 SEIS round has closed that door. If both are on the table, map the order out before anyone signs.
Both schemes also expect the money to go into a qualifying trade. Most trades qualify, but a company may not if more than 20% of its trade is in excluded activities such as property development, legal or financial services, farming, leasing, or running a hotel or nursing home.
Do you need SEIS or EIS advance assurance?
Advance assurance is HMRC’s view, before the shares are issued, that an investment is likely to qualify. You do not have to get it, and HMRC describes it as something you can use to show potential investors that their investment may qualify. You apply online, and you need a separate application for each proposed investment. HMRC’s manual says it aims to respond to most applications within 15 working days, and within 40 working days for complex cases, so build that into the timetable for your raise (VCM60170).
HMRC asks for a detailed pack, including:
- how much you plan to raise and what the money is for
- a business plan and financial forecasts
- your latest accounts
- the memorandum and articles of association and the register of members
- the documents you will give investors
- an explanation of how you meet the risk to capital condition
- details of your potential investors, which HMRC usually needs
The risk to capital condition deserves the most care in the application. HMRC wants to see that the company intends to grow its revenue, customers and employees over the long term, and that investors are genuinely exposed to losing more than they might gain. Arrangements that protect investors’ capital or give them an early way out fail the test.
Clean, up-to-date accounts make this far easier. A company that is still reconstructing last year’s figures when an investor asks for them is not ready to apply.
What happens after the money comes in?
Once the shares are issued, the company files a compliance statement: form SEIS1 or EIS1. For SEIS, the company can file once it has carried on the qualifying trade for at least four months, or spent at least 70% of the money raised. For EIS, the trade must have run for at least four months, and HMRC’s manual sets the latest date as two years after the end of the tax year the shares were issued in, or two years after that four-month period ends, whichever is later.
If HMRC accepts the statement, the company issues compliance certificates, SEIS3 or EIS3, to its investors. Investors need that certificate before they can claim relief, so a delayed or missed compliance statement can hold up or cost them the relief they invested for.
After that, the company still has to stay within the rules for the qualifying period. Investors need to hold their shares for at least three years, and changes that break the conditions can lead to relief being withdrawn.
As for how long the schemes will last, EIS has a sunset clause, now extended to 6 April 2035, and SEIS relief has no end date. Both are currently set to remain available, subject to future Budgets.
Getting the numbers investor-ready
eAccounts is a Xero Platinum Partner, and for founders the practical value is books that stand up to scrutiny: accurate bookkeeping, year-end accounts, corporation tax and tax planning. That is the base every advance assurance application and compliance statement is built on.
If the company is still an idea, both schemes need a company to issue the shares, so company formation comes first. Knowledge-intensive companies spending on research and development may also be able to claim R&D tax relief alongside a raise.
If you are a director weighing up how to pay yourself alongside a raise, our guide to director salary and dividends for 2026/27 is a useful companion. To talk about getting your company ready for investors, get a quote.
Questions founders ask
Can a company use both SEIS and EIS?
Yes, and many do: SEIS for a first small round, EIS for later ones. The order matters. SEIS has to come first, because a company cannot use SEIS once it has received EIS investment, and EIS shares must be issued at least one day after any SEIS shares.
How long does advance assurance take?
HMRC aims to respond to most applications within 15 working days, and within 40 working days for complex cases. It is not required, but many investors will want to see it before they commit.
Who claims the tax relief, the company or the investor?
The investor claims it, but only once they have a compliance certificate (SEIS3 or EIS3). The company gets those certificates by filing a compliance statement (SEIS1 or EIS1) with HMRC after the shares are issued.
What happens if the company files the compliance statement late?
Investors cannot claim relief until the company has filed and HMRC has authorised the certificates, so a delay holds up their claims. For EIS, HMRC’s manual sets a latest filing date of two years after the end of the tax year the shares were issued in, or two years after the four-month trading period ends, whichever is later.
Lewis shares practical guidance for UK businesses on accounting, tax and digital compliance.
