About EIS/SEIS
What are the EIS and SEIS?
The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are Government schemes that provides a range of tax reliefs for investors who subscribe for qualifying shares in qualifying companies.
The EIS and SEIS tax reliefs incentivise private investors who invest in early stage businesses, that might otherwise struggle to raise equity finance. The schemes play an important role in facilitating the smooth flow of risk equity capital from private individuals to early stage businesses.
The EIS and SEIS are responsible for £34billion of private investment into 59,000 businesses and counting...
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Frequently asked questions
EIS and SEIS are UK government-backed investment schemes designed to encourage investment into early-stage, high-growth companies.
- SEIS supports very early-stage startups raising their first external capital.
- EIS supports more established growth companies seeking to scale.
Both schemes offer significant tax reliefs to investors to compensate for the higher risk of investing in young companies.
EIS and SEIS provide some of the most generous tax incentives available in the UK:
- SEIS: 50% income tax relief on investments up to £200,000 per tax year, plus Capital Gains Tax (CGT) exemption on qualifying gains.
- EIS: 30% income tax relief on investments up to £1 million per year (or £2 million for knowledge-intensive companies), with CGT deferral and exemption on qualifying gains.
Loss relief is also available under both schemes if investments fail.
To qualify, companies must be UK-based, unquoted (or AIM-listed for EIS), and carry on a qualifying trade.
- SEIS companies must be less than 3 years old and have fewer than 25 employees.
- EIS companies must generally have fewer than 250 employees (500 for knowledge-intensive companies).
Both schemes exclude certain sectors, such as property development and financial services.
EIS and SEIS investments are high risk and long term. Early-stage companies may fail, and investments are illiquid, meaning they cannot be easily sold.
However, the tax reliefs can significantly reduce downside risk, and successful investments can deliver strong returns. Investors should ensure these schemes align with their risk tolerance and seek professional advice.
Yes. To qualify for SEIS, a company must be less than 3 years old at the time of the share issue. The age is measured from the date the company first began trading (not the date of incorporation, if different). The company must also not have previously carried on another trade before starting the qualifying trade.
Yes, but the rules are slightly different from SEIS.
For most companies, EIS shares must be issued within 7 years of the company’s first commercial sale. For knowledge-intensive companies (KICs), this limit is extended to 10 years.
If the company has previously received risk finance investment (such as SEIS or EIS), additional funding may still qualify beyond these limits in certain growth or “follow-on” circumstances.
The 7-year (or 10-year for KICs) clock starts from the company’s first commercial sale to a third party. This generally means the first time the company generates trading income from its core business activities. Preparatory activities, product development, or market research alone do not usually start the clock unless a sale is made.