Quick answer, reviewed 11 October 2026
Qualifying investors may claim 50% SEIS or 30% EIS Income Tax relief, subject to their own eligibility and UK tax liability. SEIS has a £250,000 company funding limit. From 6 April 2026, most EIS companies have £10 million annual and £24 million lifetime scheme funding limits, with different rules for knowledge-intensive and specified Northern Ireland companies. Neither relief guarantees investment or protects capital.
Tax relief supports a qualifying investment
SEIS and EIS encourage investment in eligible companies by giving individual investors conditional tax relief. They do not guarantee that a startup will raise a round, receive a higher valuation or produce a return. Commercial due diligence, the business plan and the actual share terms remain central.
A qualifying £50,000 SEIS investment can produce £25,000 of Income Tax relief if the investor has sufficient UK Income Tax liability and meets the conditions. That is a conditional tax reduction rather than an immediate refund promised to every investor. Relief can be withdrawn if conditions cease to be met. The investor can still lose the money invested.
SEIS: company and trade conditions
The company can generally raise up to £250,000 under SEIS, including relevant aid counted under the scheme rules. At the share issue, gross assets must not exceed £350,000 and the company and its subsidiaries must have fewer than 25 full-time-equivalent employees. The qualifying trade must not have been carried on for more than three years, including where another person transferred it to the company.
The age test concerns the trade, rather than simply the company's incorporation date. UK establishment, independence, qualifying activities and subsidiary conditions also apply. Having previously received EIS or VCT investment prevents a later SEIS issue. Money must be used for qualifying purposes within the relevant three-year window. See HMRC's SEIS company guidance.
EIS company limits increased in April 2026
For most companies from 6 April 2026, the combined scheme investment limits are £10 million in any twelve months and £24 million over the company's lifetime. Gross assets must not exceed £30 million before the issue and £35 million immediately afterwards. The ordinary employee limit is fewer than 250 full-time equivalents.
These limits include relevant investment through the specified venture capital schemes and can include subsidiaries, acquired businesses and other counted funding. The usual first-investment age limit is seven years from the first commercial sale, with detailed exceptions. The old £5 million annual, £12 million lifetime and £15 million pre-issue asset figures are not the standard limits for most current issues. Source: HMRC's EIS guidance, updated 6 April 2026.
Specified companies, broadly certain Northern Ireland companies trading in goods or the wholesale electricity market, retain different limits: £5 million annually, £12 million over the lifetime, and £15 million/£16 million gross assets. Excluded activities still apply. Review this status rather than assuming one UK-wide set of thresholds fits every business.
Knowledge-intensive companies
Most qualifying knowledge-intensive companies can raise up to £20 million annually and £40 million over their lifetime. Knowledge-intensive specified companies retain £10 million annual and £20 million lifetime limits. Qualifying as knowledge intensive involves statutory conditions; a technology label or large development budget alone is insufficient.
Other tests, including employees and the age window, differ for knowledge-intensive businesses. Use HMRC's updated knowledge-intensive guidance alongside the main EIS rules before presenting eligibility to investors.
The investor's relief is a separate assessment
SEIS Income Tax relief is 50% on qualifying investment up to £200,000 per tax year. EIS relief is 30% on up to £1 million, or up to £2 million where the amount above £1 million is invested in qualifying knowledge-intensive companies. Relief cannot exceed the relevant UK Income Tax liability. Carry-back may be available under the applicable conditions.
Capital Gains Tax relief is conditional too. Disposal relief normally requires the appropriate holding period and Income Tax relief to have been obtained and retained. EIS deferral relief and SEIS reinvestment relief have separate rules; they are not the same benefit. Loss relief also depends on the actual net loss and the investor's position. See HMRC's investor guide.
Check shareholdings, employment, directorship, connections and any value received from the company. Different director exceptions exist, so an investor should neither assume that every director is excluded nor that every founder can claim. The company's qualifying status does not establish an individual's entitlement.
Advance assurance is useful but limited
Advance assurance asks HMRC whether the proposed issue is likely to meet particular company conditions on the information provided. It does not guarantee an investor's tax relief, assess the commercial prospects or cover undisclosed changes. Its scope must be read in the actual letter.
Prepare a consistent business plan, forecasts, proposed share rights, funding history and intended use of proceeds. Explain how the risk-to-capital condition is met. Include the investor information required for the application. See HMRC's advance assurance process.
Issue shares and maintain the conditions
Review the articles, subscription agreement and any side arrangements before issuing fully paid qualifying shares for cash. Rights giving capital protection or arrangements for an early exit can undermine qualification. Schedule SEIS before EIS where both form part of a funding plan; legal sequencing matters.
After the issue, the company submits the relevant SEIS1 or EIS1 compliance statement when eligible. HMRC authorisation is required before the company provides the compliance certificates investors use to claim relief. Keep a separate file for each share issue, including bank receipts, approvals, the cap table and certificates.
EIS money generally must be spent within two years of investment or, if later, commencement of trading; SEIS generally has a three-year window. Monitor ongoing conditions and report relevant changes. A fundraising checklist should continue after the round closes, covering spending, corporate changes and investor communications through the qualifying period.
For a Harrow startup, the practical starting point is the same as elsewhere: understand the trade, ownership, funding already received and proposed terms. Those facts determine the appropriate tax review and legal support.
Frequently asked questions
Does SEIS guarantee investors a 50% cash refund?
No. SEIS offers conditional Income Tax relief at 50% of qualifying investment, subject to investor eligibility and sufficient UK Income Tax liability. Relief can be withdrawn and capital remains at risk.
What are the ordinary EIS company funding limits from April 2026?
Most companies can raise up to £10 million in any twelve months and £24 million over their lifetime under the counted schemes. Knowledge-intensive and specified Northern Ireland companies have different limits.
Does HMRC advance assurance guarantee all investor relief?
No. It addresses particular company conditions on the information supplied. The investor’s own eligibility, the actual share issue and ongoing compliance still need to be satisfied.
Reviewed against the linked primary sources on 11 October 2026. This guide gives general information; the tax treatment depends on your circumstances and the relevant tax or accounting period.
For support with your records and calculations, see our startups service or contact Angel Accountancy to discuss your requirements.