What is the difference between SEIS and EIS?
Short answer
SEIS gives investors 50% income tax relief on up to £200,000 per tax year, but only for very early-stage companies. EIS gives 30% relief on up to £1 million (£2 million for knowledge-intensive companies) in a broader range of early businesses. Both exempt gains from CGT after three years.
SEIS and EIS are both HMRC-administered tax reliefs designed to make investing in early-stage UK companies less risky — but they target different stages of company, and the generosity of the relief differs accordingly.
The headline differences
- SEIS (Seed Enterprise Investment Scheme): 50% income tax relief on investments up to £200,000 per tax year. Reserved for the riskiest, very early-stage companies — under three years old, fewer than 25 employees, gross assets under £350,000. A company can raise up to £250,000 under SEIS in its lifetime.
- EIS (Enterprise Investment Scheme): 30% income tax relief on investments up to £1 million per tax year — £2 million for knowledge-intensive companies. Open to later-stage but still early businesses with up to 250 employees.
Both schemes share the same long-term sweeteners: gains on shares held for at least three years are exempt from Capital Gains Tax, and loss relief softens the blow if the company fails. Sell within three years and the income tax relief is clawed back — though if the company is acquired early for genuine commercial reasons, relief is normally retained.
How companies use them together
A company can use both, in sequence: SEIS first for the seed round, then EIS once the SEIS limit is reached or the company outgrows SEIS eligibility. They cannot be mixed in the same share issue. Companies should obtain Advance Assurance from HMRC before advertising either scheme to investors — most equity crowdfunding platforms will not approve a campaign without it.
Two caveats worth knowing. First, the reliefs only benefit UK taxpayers — overseas investors cannot claim them, which is why UK angel networks focus on UK-taxable investors. Second, HMRC can withdraw relief during the three-year compliance period if conditions are breached — for example, the company ceasing its qualifying trade or the investor receiving value from the company — so take specialist advice before any significant corporate transaction in that window.
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