SEIS & EIS Guide for UK Founders (2026)

If you are raising an early round in the UK, two acronyms will come up in almost every investor conversation: SEIS and EIS. These government-backed tax-relief schemes are among the most powerful fundraising tools available to UK startups, because they make investing in your company dramatically less risky for the people writing the cheques. A founder who understands them raises faster and on better terms. A founder who does not leaves money on the table.

This SEIS EIS guide explains what the two schemes are, how they work, why they matter for your raise, and the practical steps to get your company ready. Tax rules change and specific figures are set by HM Revenue and Customs, so treat the numbers here as general context and always confirm the current limits and rules with HMRC or a qualified adviser before you act.

Here is what this guide covers:

1. What SEIS and EIS actually are
2. How SEIS works
3. How EIS works
4. Why the schemes matter for your raise
5. Whether your company qualifies
6. Advance Assurance, the founder's secret weapon
7. The practical steps to get ready

What SEIS and EIS actually are

SEIS, the Seed Enterprise Investment Scheme, and EIS, the Enterprise Investment Scheme, are UK government initiatives designed to encourage private investment into early-stage, higher-risk companies. They do this by offering generous tax reliefs to individual investors who back qualifying startups. In plain terms, the government absorbs a large share of an investor's downside risk in exchange for that investor putting capital into young British companies.

SEIS targets the very earliest stage, brand new companies raising their first outside money. EIS picks up where SEIS leaves off, supporting slightly more established but still early-stage businesses raising larger sums. Many UK startups use SEIS first and then move to EIS for subsequent rounds. If you are mapping out where these fit alongside grants and other non-dilutive options, it is worth seeing the full picture of UK funding routes, including a dedicated breakdown of the SEIS and EIS schemes for UK founders.

How SEIS works

SEIS is aimed squarely at the seed stage. It lets qualifying investors claim income tax relief on money they invest in eligible new companies, with additional relief available if the shares are later sold at a loss, plus capital gains advantages. The combined effect is that an investor's real, after-tax exposure on a SEIS investment is far smaller than the headline cheque, which is precisely why so many UK angels ask whether a deal is SEIS-eligible before anything else.

Key features of SEIS in broad terms:

• Income tax relief. Investors can claim a substantial percentage of their investment back against their income tax bill in the year of investment.
• Loss relief. If the company fails, investors can offset much of the remaining loss against tax, cushioning the downside.
• Capital gains treatment. Gains on SEIS shares held for the qualifying period can be free of capital gains tax, and there are reliefs for reinvesting existing gains.
• Company and investment limits. There are caps on how much a company can raise under SEIS across its lifetime, how young and how small it must be, and how much each investor can put in per year.

Because HMRC sets and periodically updates the exact percentages and monetary caps, confirm the current SEIS figures directly with HMRC before you build them into your pitch or your cap table.

How EIS works

EIS is the larger sibling. It supports early-stage companies that have typically outgrown SEIS but are still young and higher-risk. The reliefs are structured similarly, income tax relief on the investment, capital gains advantages and loss relief, though the percentages and the caps differ from SEIS, generally allowing companies to raise larger amounts and investors to commit bigger cheques.

The typical UK journey is a SEIS round at the very start, then one or more EIS rounds as the company grows. Both schemes have rules about the age of the company, the number of employees, the amount of gross assets, and the trades that qualify. Miss those conditions and the relief can be withdrawn, which is why getting the structure right early is so important.

Why the schemes matter for your raise

For a UK founder, SEIS and EIS are not just tax trivia. They are a genuine fundraising advantage:

• They widen your investor pool. Many UK angels invest primarily or exclusively in SEIS and EIS-eligible companies. Being eligible puts you on their radar.
• They de-risk the cheque. The reliefs mean an investor's true exposure is a fraction of the amount invested, which makes a yes far easier.
• They can improve your terms. Lower effective risk can support a healthier valuation and a smoother negotiation.
• They speed up decisions. With the downside cushioned by the government, investors move faster to commit.

In short, eligibility is a signal that you understand the UK ecosystem and have made yourself easy to back. When you approach UK angel investors and funds, the first question many will ask is whether the round qualifies for SEIS or EIS. Having a clear, confident answer is a competitive edge.

Whether your company qualifies

Not every company is eligible, and the conditions are specific. In broad strokes, to qualify a company generally needs to be UK-based with a permanent establishment, be relatively young and small at the time of investment, carry on a qualifying trade, and use the money raised for growth. Certain sectors and activities are excluded, and there are limits on employee numbers and gross assets.

The details matter enormously and the thresholds are set by HMRC, so this is exactly the kind of thing to check against current guidance or with an adviser rather than assuming. Getting eligibility confirmed before you start raising protects both you and your investors from a nasty surprise later.

Advance Assurance, the founder's secret weapon

Here is the single most useful practical step. Before you raise, you can apply to HMRC for Advance Assurance, a provisional indication that your company and your proposed share issue are likely to qualify for SEIS or EIS. It is not an absolute guarantee, but it is the closest thing to one, and it transforms your investor conversations.

With Advance Assurance in hand, you can tell investors that HMRC has already indicated the round should qualify. That removes a major uncertainty and is often the difference between a maybe and a yes. Most experienced UK angels will expect to see it. Applying for it should be one of the first things on your pre-raise checklist, not an afterthought.

The practical steps to get ready

Turning SEIS and EIS from theory into a fundraising advantage comes down to a clear sequence:

1. Check your eligibility. Confirm your company, trade and structure meet the current HMRC conditions before you do anything else.
2. Apply for Advance Assurance. Submit your application to HMRC early so you can wave it in front of investors.
3. Structure the round correctly. Make sure the share class, the use of funds and the timing all fit the scheme rules.
4. Build your investor list. Target UK angels and funds who actively back SEIS and EIS deals.
5. Issue the right paperwork. After the raise and the qualifying period, provide investors with the certificates they need to claim their relief.

Handle those five steps well and SEIS and EIS become one of the strongest cards in a UK founder's hand: cheaper capital, a wider investor pool and a faster path to close.

SEIS or EIS first? A quick note on sequencing

A question founders ask constantly is which scheme to use and when. For most UK startups the answer is a natural progression. You use SEIS at the very start, for your first outside capital, because it offers the most generous relief and is designed for the youngest companies. Once you have used your SEIS allowance or grown beyond its limits, you move to EIS for larger, later rounds. It is common to run a SEIS round and an EIS round close together, with different investors or different portions of the same raise, provided you respect the ordering and limits HMRC sets. Because the interaction between the two schemes has precise rules, this is another point where a quick check with an adviser saves a lot of pain later.

A final word

SEIS and EIS are among the best reasons to raise in the UK. They de-risk your round for investors, widen the pool of people willing to back you, and can genuinely improve your terms. The mechanics are precise and the figures are set and updated by HMRC, so use this guide as a map, not as tax advice, and confirm every number and condition against current HMRC guidance or a qualified adviser before you act.

Once your company is scheme-ready, the next job is putting it in front of the right backers. Start building your list of UK investors who actively fund early-stage startups and turn your SEIS or EIS eligibility into a closed round.