SEIS and EIS Explained: UK Startup Funding in 2026

SEIS and EIS are UK venture capital schemes giving individual investors income tax and capital gains relief for buying new shares in qualifying unlisted companies. SEIS covers a company's first £250,000 at 50% relief; EIS covers up to £10 million a year at 30%. Both require you to meet HMRC's tests and keep meeting them for three years.

For a UK founder, these schemes are not a tax footnote — they are the reason a British angel will consider a pre-revenue company at all. An investor putting £50,000 into a SEIS-qualifying company gets £25,000 back in income tax relief, and loss relief on top if the company fails. That changes the risk arithmetic enough to move money.

What Are SEIS and EIS?

They are two of the UK's four venture capital schemes, administered by HMRC, that reduce an investor's tax bill in exchange for buying newly issued shares in a small unlisted company and holding them for at least three years. The government's overview of venture capital schemes covers all four; the statutory basis sits in Part 5A of the Income Tax Act 2007 for SEIS.

The sequence matters: SEIS comes first and EIS comes second. A company that has already received EIS or Venture Capital Trust money cannot subsequently use SEIS. Founders who skip SEIS to take a larger EIS round have permanently given up the 50% relief tier.

Note that Social Investment Tax Relief, the fourth scheme, closed to new investments made on or after 6 April 2023. If you are reading guidance that still treats SITR as live, it is out of date.

What Does SEIS Give a UK Founder in 2026?

SEIS lets a qualifying company raise a lifetime maximum of £250,000, and gives individual investors 50% income tax relief on up to £200,000 of investment per tax year. The company-side rules are set out in HMRC's guidance on applying to use SEIS.

To qualify, your company and any subsidiaries must:

The £250,000 ceiling includes any other de minimis state aid received in the three years up to and including the investment date, and it counts towards your later limits under the other schemes. The money must be spent within three years of the share issue, on a qualifying trade, on preparing to carry one out, or on R&D expected to lead to one.

What Does EIS Give You, and When Do You Switch?

EIS lets most companies raise up to £10 million in any 12-month period and £24 million over the company's lifetime, with 30% income tax relief for investors on up to £1 million per tax year. The company conditions are in HMRC's guidance on applying for EIS.

The qualifying tests loosen considerably:

Two carve-outs are worth knowing. Specified companies — registered in Northern Ireland and trading in goods or the wholesale electricity market — face lower ceilings of £5 million per 12 months and £12 million lifetime, and £15 million in gross assets. Knowledge-intensive companies that carry out a significant amount of research, development or innovation get higher limits, and their investors get a £2 million annual relief allowance provided at least £1 million goes into knowledge-intensive companies.

The £10 million and £24 million ceilings are aggregate: they count EIS, VCTs, SEIS and other risk-finance state aid together, including money received by subsidiaries, former subsidiaries and businesses you acquired.

SEIS vs EIS: The Qualifying Tests Side by Side

The schemes differ on five axes, and your company usually only qualifies for one of them at a time.

Both schemes share the same three-year clock: tax reliefs are withheld or withdrawn from your investors if you stop following the rules within three years of the investment. That is a live obligation on the company, not on them. Selling the business to an acquirer that breaks a condition, or pivoting into a non-qualifying trade, can claw back relief your investors have already claimed.

How Much Capital Actually Flows Through These Schemes?

In the 2024 to 2025 tax year, 2,430 companies raised £276 million under SEIS and 3,735 companies raised £1,575 million under EIS, according to HMRC's published statistics. The EIS and SEIS statistics release is the authoritative source and is updated annually.

What the data tells a founder planning a raise:

Divide £276 million by 2,430 companies and the average SEIS raise is roughly £114,000 — well under the £250,000 ceiling. Most UK founders do not max out the scheme, usually because they run out of investors before they run out of allowance.

How the Paperwork Works: Advance Assurance to EIS3

The sequence is advance assurance, then the share issue, then a compliance statement, then HMRC authorises you to issue certificates your investors use to claim. Getting this order wrong is the most common way a UK seed round stalls.

HMRC is explicit that advance assurance is not an endorsement of the company and is no substitute for an investor's own due diligence. The full technical detail sits in the Venture Capital Schemes Manual.

Which Trades Do Not Qualify

Your company may fail the test if more than 20% of its trade falls into an excluded category. HMRC's list includes coal or steel production, farming and market gardening, leasing activities, legal or financial services, property development, running a hotel, running a nursing home, energy generation, production of gas or other fuel, exporting electricity, and banking, insurance, debt or financing services.

Two traps catch founders regularly:

How to Build a SEIS/EIS Investor List

The qualifying rules are the easy part. The hard part is finding the several dozen UK individuals who will actually write the cheques, and the arithmetic is unforgiving. At an average SEIS raise of roughly £114,000, and typical angel tickets of £10,000 to £25,000, you need somewhere between six and twenty committed investors — which means a pipeline several times that size.

Three practical filters, in order:

GIGABOOST scores investors across 25 fit factors, so you can narrow a global database down to UK-based angels and funds that match your stage and sector, then run outreach from the same system. For the sequencing of a first angel round, see our guide to finding angel investors, and for the full outbound process, the 2026 playbook.

For market context on UK and European venture activity, the British Private Equity and Venture Capital Association publishes industry research, and the FCA's financial promotions rules govern how you may market an investment opportunity in the UK — a separate regime from the tax schemes, and one founders routinely overlook when they start advertising a raise.

This is not tax or legal advice. SEIS and EIS conditions are detailed and change with each Finance Act; confirm your position with a qualified UK adviser before you issue shares.

Frequently Asked Questions

Can a company use SEIS and EIS at the same time?

Not for the same share issue, and the order is fixed. SEIS must come first — once a company has received EIS or Venture Capital Trust investment, it can never use SEIS. Many UK companies raise their first £250,000 under SEIS and then move to EIS for the next round, which is the intended path. The SEIS money counts towards the EIS lifetime ceiling.

How long does advance assurance take from HMRC?

HMRC does not guarantee a turnaround time and the queue varies through the year, so treat it as a lead time of weeks rather than days and start before you begin fundraising conversations. Applications are slower when the trade description is vague or the business plan does not clearly evidence the risk to capital condition. Submit a complete application with a named prospective investor.

What happens to my investors if the company fails?

SEIS and EIS investors who have held qualifying shares for three years keep their income tax relief, and loss relief against income or capital gains is generally available on the net loss. This asymmetry is the reason these schemes work: the downside is partly underwritten by the Treasury. If the company breaches the scheme rules within three years, relief can be withdrawn instead.

Does my company need to be UK-incorporated to qualify?

For SEIS the company must be established in the UK. For EIS the test is a permanent establishment in the UK, which is a different and somewhat broader standard. A foreign-incorporated company with genuine UK operations may qualify for EIS, but the analysis is fact-specific and belongs with UK counsel before you issue shares, not after.

Can overseas investors claim SEIS or EIS relief?

Income tax relief can only be claimed against UK income tax that the investor actually owes, and unused relief cannot be carried forward. An investor with no UK tax liability gets no benefit from the income tax relief, whatever their residence. This is why a SEIS round is almost always filled by UK-resident individuals rather than international funds.

The Bottom Line

SEIS first, EIS second, advance assurance before you fundraise, and a three-year obligation that starts the day the money lands. The schemes are the single biggest reason a UK angel will fund a pre-revenue company, and the average SEIS raise of roughly £114,000 says most founders run out of investors long before they run out of allowance. Build the list first.