SEIS gives investors 50% tax relief, EIS gives 30%: what qualifies
SEIS gives investors 50% income tax relief and EIS gives 30%. Here is what the schemes require from your company, and what changed on 6 April 2026.
Founders raising from angels in Britain often find that investors ask about two HMRC schemes early in the conversation. The Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) give individual investors income tax relief when they buy shares in qualifying early-stage companies. SEIS relief is 50% of the amount invested. EIS relief is 30%.
The EIS and venture capital trust limits changed on 6 April 2026. The gross asset and investment caps for EIS rose, and VCT income tax relief fell from 30% to 20%. This guide sets out what the reliefs give investors, what a company must meet, and what advance assurance and the compliance steps involve, using GOV.UK guidance as the source.
What each relief gives an individual investor
SEIS offers the higher rate. An investor can claim income tax relief at 50% of the amount invested, on up to £200,000 a year. EIS offers 30% relief on up to £1 million a year. That rises to £2 million if at least £1 million goes into knowledge-intensive companies.
Both schemes require the shares to be held for at least three years. The capital gains treatment differs. SEIS gives reinvestment relief covering 50% of the amount invested, capped at £100,000. EIS gives deferral relief on 100% of the amount invested. In both schemes, gains on the shares are exempt if the investor received income tax relief and held the shares for the minimum period, and losses can be set against income.
What changed on 6 April 2026 for EIS and VCTs
From 6 April 2026, the gross asset test for EIS and VCT companies is £30 million immediately before a share issue and £35 million immediately after it. Previously it was £15 million and £16 million. The lifetime investment limit for most companies rose from £12 million to £24 million, and the annual limit rose from £5 million to £10 million.
For knowledge-intensive companies, the lifetime limit rose from £20 million to £40 million, and the annual limit rose from £10 million to £20 million. The increases do not apply to every company. Qualifying companies registered in Northern Ireland that trade in goods, or in the generation, transmission, distribution, supply, wholesale trade or cross-border exchange of electricity, keep the current limits. The same change reduced VCT income tax relief from 30% to 20%.
The EIS guidance also lists lower figures for what it calls specified companies: £15 million and £16 million in gross assets, a £12 million lifetime limit and a £5 million annual limit. A specified company is one with its registered office in Northern Ireland that trades in goods, or in the wholesale electricity market, including the generation, transmission and distribution of electricity; these companies keep the lower limits.
The conditions a company must meet to qualify
SEIS is the narrower scheme. The company and its subsidiaries must have gross assets of no more than £350,000 when shares are issued, and fewer than 25 full-time equivalent employees. The company can receive no more than £250,000 through SEIS, including other de minimis state aid received in the previous three years. A company that has taken EIS or VCT investment cannot use SEIS. Money raised must be spent within three years of the share issue.
EIS sets different conditions. The EIS guidance lists fewer than 250 full-time equivalent employees, an investment made within seven years of the company's first commercial sale, and spending within two years of the investment. The company must have a permanent establishment in the UK. It must not be trading on a recognised stock exchange, must not be controlled by another company or more than 50% owned by one, and must not use the money to buy all or part of another business.
The EIS page also lists a risk to capital condition, and the SEIS page asks for an explanation of how it is met when a company applies without advance assurance.
Advance assurance: what it is and what to prepare
Advance assurance is a request to HMRC asking whether a planned share issue is likely to qualify before the company goes ahead. If HMRC agrees the plan is likely to qualify, it gives an advance assurance letter. The GOV.UK pages do not set out how long HMRC takes or how to apply step by step.
The SEIS guidance separates the paperwork by whether a company already holds advance assurance. With it, the company supplies only documents that have changed since HMRC issued it. Without it, the full set includes a business plan and financial forecasts, the latest accounts, an explanation of how the risk to capital condition is met, and the articles of association.
The pages give no processing time, so any round timetable that depends on advance assurance rests on an estimate the sources do not provide.
“The reliefs describe what an investor can claim, not what a round will cost.”
The compliance steps after the share issue
Advance assurance does not complete the process. For SEIS, a company can submit a compliance statement once it has carried out its qualifying trade for at least four months, or has spent at least 70% of the amount raised. For EIS, the trigger is four months of qualifying activity. The EIS statement must be submitted within two years of that date, or within two years of the end of the tax year in which the shares were issued, whichever is later. A separate statement is needed for each share issue.
HMRC then sends the company a letter of authorisation, a unique reference number and a compliance certificate, which the company completes and issues to investors — SEIS3 for SEIS, EIS3 for EIS. Investors need the certificate to claim relief.
The company must keep to the scheme rules for at least three years after the investment. If it breaks them in that period, investors can lose their relief. The EIS guidance also says the company must tell HMRC within 60 days if it no longer meets the conditions.
What the sources do and do not show about cost
The reliefs describe what an investor can claim, not what a round will cost. The GOV.UK pages set out the investor's relief and the company's conditions. They do not compare the cost of raising money in Britain with other countries, and they do not measure what the reliefs do to valuations or round terms.
Founders who want evidence on that question will need sources the GOV.UK pages do not contain. The reliefs also depend on each investor's own tax position, which the company does not control.
