The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are some of the most generous tax reliefs available to UK investors in early-stage companies. For founders, fluency in the schemes makes raising capital materially easier — angel investors will often only consider companies that qualify.
The high-level mechanics
- SEIS — investors receive 50% income tax relief on investments up to £200,000 per tax year. Companies can raise up to £250,000 in total.
- EIS — investors receive 30% income tax relief on investments up to £1m (or £2m if at least £1m is in knowledge-intensive companies). Companies can raise up to £12m over their lifetime.
- Both schemes offer CGT deferral and full CGT relief on the disposal of the qualifying shares (after a 3-year holding period).
- Loss relief is available against income tax if the investment fails — meaningful downside protection for the investor.
Advance Assurance
Always get HMRC Advance Assurance before raising. It is not a strict legal requirement, but in practice no sophisticated investor will commit without it. The application is short — a covering letter, articles of association, latest financials, and a one-page business plan.
Compliance after the raise
- Issue compliance certificates (SEIS1 / EIS1) to HMRC within 4 months of share issue, or you cannot give your investors their tax relief.
- Pass the certificates (SEIS3 / EIS3) to investors so they can claim relief on their personal tax returns.
- Maintain qualifying activity throughout the 3-year window — the rules around the company's trade, ownership, and disqualifying purposes are strict.
- Keep records — HMRC can revisit any of this years after the raise.
A sharp founder team can do most of this work themselves. The places we add value are scheme-strategy decisions early on (when SEIS converts to EIS, how to structure tranches, how to handle convertibles) and the post-raise compliance discipline that keeps everyone's tax relief intact.
