How SEIS and EIS income tax relief can be carried back to the previous tax year

Written by Peter Allen MAAT, co-founder and Finance Director of Buzz Accounting, with more than 20 years in accountancy · 28 October 2026

An investor does not have to claim SEIS or EIS income tax relief against the tax year the shares were actually issued in. The relief can be carried back and claimed against the tax year before instead. This becomes relevant whenever a round closes near the end of a tax year, or whenever an investor's own tax position in the year of the investment looks very different from the year before it.

What carrying back relief means

Section 158(4) of the Income Tax Act 2007 lets an investor treat some or all of a SEIS or EIS share subscription as if the shares had been issued a tax year earlier than they actually were, and claim the income tax relief against that earlier year's tax bill. HMRC's helpsheets HS341 for EIS and HS393 for SEIS describe the same two-part process: the current-year amount goes on the investor's own Self Assessment return, and the carried-back amount goes on the claim form printed on the SEIS3 or EIS3 certificate your company issues, sent to HMRC separately. An investor can carry back all of a subscription, part of it, or none, and can split the remainder between the two years.

Why an investor would use it

SEIS gives an individual investor 50% income tax relief on up to £200,000 subscribed in a tax year. EIS gives 30% on up to £1m, or £2m if at least £1m of that goes into knowledge-intensive companies. Relief can only be set against tax actually due in the year it is claimed for, so an investor who had a large bonus or a share sale just before your round, but expects a quieter year once the shares are issued, gets more use from the relief by setting it against the earlier year's bigger tax bill. An investor who has already used their relief allowance for the earlier year simply claims in the year the shares were issued.

The earlier year's own limit still applies

Carrying relief back does not create a second allowance. HMRC's internal guidance (VCM10530) confirms there is no separate cap on the amount an investor can elect to carry back, but whatever is carried back still counts against the overriding limit for the year it lands in: £200,000 for SEIS, £1m or £2m for EIS. An investor who already subscribed for SEIS or EIS shares in the earlier year has both amounts added together against that one limit. The limits also move over time: SEIS's annual limit was £100,000 before 6 April 2023, when it doubled to £200,000, so a subscription carried back past that date could only use the lower limit in force then.

A worked example

Worked example — illustrative. An investor with a quiet year ahead.

Priya subscribes for £150,000 of SEIS shares in your company in June 2026, in the 2026/27 tax year.
In 2025/26 she sold shares in a previous business and paid tax on taxable income of £420,000. In 2026/27, on a planned sabbatical, she expects taxable income of only £60,000.
The relief on her subscription is 50% of £150,000, which comes to £75,000.
Her 2026/27 tax bill is nowhere near £75,000, so she elects to carry the whole £150,000 back and claims the £75,000 against 2025/26, where her tax bill easily covers it.
She made no other SEIS investment in 2025/26, so the £150,000 fits inside that year's own £200,000 limit with room to spare.

Priya still needs her SEIS3 certificate before she can make either claim, so a certificate that arrives late leaves her less time to decide and act. Keep the actual share issue date on file, separate from either tax year under discussion, because it starts the three-year Capital Gains Tax clock for her shares no matter which year she claims the income tax relief against.

How the claim is made

An investor cannot claim, in either year, before receiving the SEIS3 or EIS3 certificate your company issues once HMRC accepts its compliance statement; our SEIS and EIS for founders post covers how that certificate is produced. Once it arrives, the current-year amount goes on the investor's Self Assessment return, and the carried-back amount goes on the claim form printed on the certificate, sent to HMRC on its own. That claim form is the route to use even if the earlier year's return has already been filed and its normal amendment window has closed. The time limit for either claim, including a carry-back claim, is five years after the 31 January following the end of the tax year the shares were issued in, so a share issue in 2026/27 can be claimed against as late as 31 January 2033.

What to do this week

When SEIS or EIS certificates go out, tell each investor plainly that carry-back is available and that the choice of how much, if any, to carry back is theirs.
Ask investors who have not decided yet which tax year gives them more spare tax to set the relief against, since that is often a different question from which year they would simply prefer to claim in.
Record the actual share issue date clearly, since it fixes the three-year Capital Gains Tax clock regardless of which year the income tax relief is claimed against.
Put the five-year claim deadline, measured from the 31 January after the issue year, in your own diary alongside your SEIS1 or EIS1 filing deadline.
Get compliance statements and certificates out as soon as the qualifying trading period allows, since carry-back is only useful once an investor has the certificate needed to claim it.

Our SEIS and EIS service prepares the compliance statement and each investor's certificate once a round closes, and checks which year's limit a carried-back claim falls under before anyone tells an investor what it is worth. See how we handle SEIS and EIS, or compare the schemes side by side on SEIS vs EIS. Get started.

Common questions

What does it mean to carry SEIS or EIS relief back to the previous tax year?

It means treating some or all of a SEIS or EIS share subscription as if the shares had been issued a tax year earlier than they actually were, so the income tax relief is claimed against that earlier year's tax bill. The election belongs to the investor, under section 158(4) of the Income Tax Act 2007, who decides how much, if any, of a subscription to carry back when they make their claim. An investor can carry back all of a subscription, part of it, or none, and can split the remainder between the two years. The usual reason is that the earlier year had more tax due to set the relief against, since relief can only be used against tax actually owed in the year it is claimed for.

How much of a SEIS or EIS subscription can be carried back?

There is no separate cap on the amount an investor can elect to carry back; HMRC's internal guidance confirms the whole subscription can be carried back if the investor chooses. What limits it is the overriding limit for the year the claim lands in: £200,000 for SEIS and £1m for EIS, or £2m if at least £1m of that goes into knowledge-intensive companies. If the investor already subscribed for SEIS or EIS shares in the earlier year, the two amounts are added together against that single limit, so a large carry-back can use up headroom the investor was planning to keep for a different investment in that year.

Which limit applies when relief is carried back, the year of issue or the earlier year?

The limit that applies is the one for the tax year the claim is actually set against, which is the earlier year once an investor elects to carry relief back. The limits can differ between tax years. SEIS's annual limit was £100,000 before 6 April 2023, when it rose to £200,000, so a subscription carried back to a tax year before that date could only use the lower limit that applied then. Checking which year's limit a carried-back claim falls under matters whenever limits have recently changed, and it matters most for an investor who has already used some of that earlier year's allowance on another SEIS or EIS investment.

How does an investor actually make the carry-back claim?

An investor claims by entering the current-year amount on their own Self Assessment return, and separately completing the claim form printed on the SEIS3 or EIS3 certificate to tell HMRC how much is carried back and claimed against the year before. Both parts need the certificate your company issues once its compliance statement is accepted by HMRC, so neither claim can be made before that arrives. If the earlier year's return has already been filed, the certificate's claim form is still the route used, without any need to amend that return. HMRC processes the carried-back amount once it receives the completed form.

Is there a deadline for making a SEIS or EIS carry-back claim?

Yes. The deadline for any SEIS or EIS income tax relief claim, including one carried back to the previous year, is five years after the 31 January following the end of the tax year the shares were issued in. A share issue in the 2026/27 tax year can therefore be claimed against as late as 31 January 2033. That window comfortably covers the weeks or months between the shares being issued and the SEIS3 or EIS3 certificate reaching the investor, as well as any time spent deciding which year to carry the relief back to.

What happens if the investor's tax bill in the earlier year is not big enough to use all the relief?

Relief that an investor carries back but cannot use against the earlier year's tax bill is lost. It does not carry forward to a later year, and it cannot be carried back any further than the one year the election allows. An investor deciding how much to carry back should check their actual tax liability for the earlier year first, because carrying back more than that year's tax bill can absorb means part of the relief is never used. Splitting the subscription, claiming part in the year of issue and carrying back only what the earlier year's tax bill can absorb, avoids wasting any of it.

Does carrying the income tax relief back change the three-year period before a gain is exempt from Capital Gains Tax?

No. The three-year period before a gain on the shares is exempt from Capital Gains Tax runs from the actual date the shares were issued. Carrying the income tax relief back to an earlier tax year changes nothing about that date or about the company's own three-year qualifying period. An investor who carries the income tax relief back to the year before investing still has to hold the shares for three years from the real issue date, in this example June 2026, before any gain is free of Capital Gains Tax, and the exemption still depends on the income tax relief being given and never later withdrawn.