The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) are the UK's most powerful tools for raising early-stage investment. They give investors generous income tax and capital gains relief in exchange for backing qualifying companies. This guide explains SEIS vs EIS, the eligibility rules, and how to secure advance assurance.
SEIS vs EIS at a glance
Both schemes reward investors for taking risk on young companies, but they target different stages:
- SEIS is for the earliest stage. A company can raise up to £250,000 in total under SEIS. Investors get 50% income tax relief on investments up to £200,000 per tax year.
- EIS is for slightly more developed companies. Investors get 30% income tax relief on up to £1 million per year (£2 million if investing in knowledge-intensive companies). A company can raise up to £5 million a year and £12 million over its lifetime (higher for knowledge-intensive companies).
Both offer capital gains tax exemption on the shares if held for at least three years, plus loss relief if the company fails — a combination that dramatically reduces an investor's downside.
SEIS eligibility rules
To be an SEIS qualifying company, broadly you must:
- Be UK-based with a permanent establishment;
- Have been trading for less than three years;
- Have fewer than 25 full-time equivalent employees;
- Hold gross assets of no more than £350,000 before the investment;
- Carry on a new qualifying trade (some activities are excluded).
EIS eligibility rules
EIS qualifying companies must broadly:
- Have fewer than 250 employees (500 for knowledge-intensive);
- Hold gross assets of no more than £15 million before investment;
- Be within seven years of their first commercial sale (10 for knowledge-intensive);
- Use the money for growth and development within set time limits.
How to get SEIS / EIS advance assurance
Advance assurance is HMRC's provisional confirmation that your company and the proposed share issue are likely to qualify. While not mandatory, almost every serious investor will ask for it before committing. To apply you submit to HMRC:
- Your business plan and financial forecasts;
- Your latest accounts (if any);
- An up-to-date copy of the memorandum and articles;
- Details of the amounts you intend to raise and from whom;
- Confirmation of how the funds will be used.
A clean advance assurance application signals to investors that the tax relief they are counting on is secure. Getting the share structure and paperwork right first time avoids weeks of back-and-forth with HMRC.
Common mistakes that lose the relief
Relief can be withdrawn if shares carry preferential rights, if the money is not deployed in time, if the investor is connected to the company, or if the SEIS/EIS compliance statements (forms SEIS1/EIS1) are filed incorrectly. These are avoidable with proper structuring.
How PushDigits can help
We help founders structure SEIS and EIS rounds, prepare and submit advance assurance applications, and manage the SEIS1/EIS1 compliance process so investors receive their tax certificates. Explore our Tax Planning service or Business Advisory for fundraising, and book a consultation.