Almost every guide to SEIS and EIS is written for investors. Here is the founder version, because these schemes are not a tax curiosity — they are your pricing power. They are the reason a UK angel will write a cheque into a company with no revenue at a valuation no spreadsheet supports, and the reason a company without them quietly pays more for the same money.

Start with the investor's arithmetic, because that is what you are selling

SEIS gives an individual investor 50% income tax relief on what they put in, up to £200,000 a tax year. EIS gives 30%, up to £1m a tax year (£2m if at least £1m of it goes into knowledge-intensive companies). Hold the shares three years and the gain is free of Capital Gains Tax. If it goes to zero, the loss can be set against income.

Worked example — illustrative. A £25,000 SEIS cheque from an additional-rate taxpayer.
  • Invested: £25,000
  • Income tax relief at 50%: £12,500 — so the net cost is £12,500
  • Company fails, shares worth nothing. Loss relief on the £12,500 net cost at 45%: £5,625
  • Real downside: £6,875 — 27.5p in the pound of the original £25,000
  • Company succeeds and the shares sell for £250,000 after three years: the entire gain is exempt from Capital Gains Tax

That asymmetry — lose 27p, keep 100% of the upside — is the whole product. When you turn up to an angel meeting without advance assurance, you are asking them to accept an ordinary risk profile for a startup-shaped return. Most will simply wait for a company that has done the paperwork.

The two schemes side by side

SEIS — for the first money in:

  • The company can raise £250,000 in total under SEIS.
  • Gross assets of £350,000 or less when the shares are issued.
  • Fewer than 25 full-time equivalent employees.
  • The trade must have been carried on for no more than 3 years before the investment.
  • The money must be spent within 3 years of the share issue.

EIS — for the rounds after that:

  • Fewer than 250 full-time equivalent employees when the shares are issued.
  • Within 7 years of your first commercial sale (10 years for a knowledge-intensive company).
  • The money must be spent within 2 years of the investment, or of the date you started trading if that is later.

What changed on 6 April 2026 — and it is big

The EIS ceilings were doubled from 6 April 2026, which pulls a whole tier of scale-ups back inside the scheme:

  • Annual limit: £10m in any 12 months, up from £5m — £20m for knowledge-intensive companies.
  • Lifetime limit: £24m, up from £12m — £40m for knowledge-intensive companies.
  • Gross assets: £30m before the share issue and £35m immediately after, up from £15m and £16m.
What that means in practice. An £8m Series A could not be done wholly under EIS before 6 April 2026, because the company's annual ceiling was £5m — so part of the round sat outside the scheme and lost its relief. Under the £10m annual limit the same round fits entirely inside EIS. If you modelled your funding path on the old numbers, the plan is now out of date in your favour.

One exception to know about: specified companies — those with a registered office in Northern Ireland carrying on a trade in goods or in the wholesale electricity market — keep the old ceilings of £5m a year, £12m lifetime, and gross assets of £15m and £16m. If that is you, plan the round to the old numbers.

The other thing founders ask about: the schemes are not about to disappear. EIS relief applies to shares issued before 6 April 2035, so a company raising today has a full decade of runway on the rules.

Advance assurance: do it before you pitch, not after

Advance assurance is HMRC confirming, in advance, that a proposed share issue is likely to qualify. It is not legally required. It is practically mandatory, because experienced angels treat its absence as a signal that nobody has checked.

You apply with your business plan, your latest accounts or forecasts, details of the proposed share issue, your articles of association, and — importantly — the names of investors who have expressed an interest, because HMRC will not consider a speculative application with no identified investors behind it. HMRC's response time is measured in weeks rather than days, so start it at the point you start building the round, not once someone has said yes.

The sequence that has to be exactly right

More relief is lost to sequencing than to eligibility. The order is:

  1. Advance assurance before you pitch.
  2. SEIS shares first, EIS shares afterwards. If EIS shares are issued before the SEIS shares, SEIS relief can be lost for everyone in that round. Where a round mixes both, the SEIS allocation is issued on an earlier day.
  3. Money in, then shares issued. The subscription money must be fully paid in cash before or at the time the shares are issued, and the shares must actually be issued — a board resolution, an updated register of members, and the SH01 filed at Companies House.
  4. Trade for four months (or, for SEIS, spend 70% of the money) before you can file the compliance statement.
  5. File SEIS1 or EIS1. HMRC issues you an SEIS2 or EIS2 with a unique reference number.
  6. Issue SEIS3 or EIS3 certificates to your investors. Only then can they claim. Until those certificates land, your investors have had a cash outflow and no relief.

The EIS1 must be filed within 2 years of the share issue, or within 2 years of the end of the tax year in which the shares were issued, whichever applies. Diary it on the day you close, because the four-month wait makes it easy to forget entirely.

Six mistakes that void the relief

  • The wrong share class. SEIS and EIS shares must be full-risk ordinary shares, paid up in cash, with no preferential right to dividends or to assets on a winding up, and not redeemable. A standard investor preference stack imported from a US template will fail this outright.
  • Converting a loan. Money that went in as a loan or a convertible generally cannot become qualifying SEIS shares later. If a bridge is likely, take advice before the money moves, not after.
  • Any arrangement that protects the investor's capital. Side letters, buy-back promises and guarantees breach the risk-to-capital condition and take the relief with them.
  • An investor who is too connected. An investor holding more than 30% of the share capital or voting rights, counting associates, does not qualify. Employees are excluded too — although a director can qualify for SEIS, and for EIS in the specific circumstances that apply to business angels.
  • Spending too slowly or on the wrong thing. The money must go into the qualifying trade within the time limit — 3 years for SEIS, 2 years for EIS. Parking it on deposit does not count as spending it.
  • Falling out of qualification within three years. The company has to keep meeting the conditions for at least three years after the investment. A change of trade, a share buy-back or the wrong kind of group restructure can withdraw relief retrospectively — from the investors, who will remember.

How this fits your wider funding plan

SEIS and EIS are equity, and equity is the most expensive money you will ever take if the company works. They belong in the plan alongside grants, R&D tax credits and debt, not instead of them — our startup funding guide compares the routes, and alternative funding beyond bank loans covers what to try before you sell any of the company.

They also tend to land at the same time as two other decisions: how you pay the team, and how you keep them. If you are granting share options in the same quarter as a raise, read EMI share options explained alongside this — the valuation work overlaps, and doing both at once saves a duplicated exercise.

What to do now

  1. If a raise is anywhere in the next twelve months, apply for advance assurance now.
  2. Check your articles and any existing investment documents for preference terms that would disqualify the shares.
  3. Confirm which limits you are working to — the new £10m and £24m ceilings, or the specified-company figures.
  4. Map the four-month clock and the compliance statement deadline into your calendar on the day the round closes.

Setting the structure up before money moves is dramatically cheaper than fixing it afterwards, and some of it cannot be fixed at all. We handle advance assurance, share issues and compliance statements for clients on any package — get started and we will take the paperwork off the critical path of your raise.