What Are EIS and SEIS?

The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are UK government initiatives designed to help early-stage businesses attract investment, while offering investors substantial tax reliefs.

EIS supports growing businesses by providing Income Tax and Capital Gains Tax relief to individuals who invest in the scheme. SEIS focuses on even earlier-stage companies and offers enhanced reliefs to offset the greater risk of investment.

For businesses, these schemes provide a recognised, tax-efficient framework to secure funding. For investors, they offer a compelling way to support innovation - while significantly reducing tax liability.

Why EIS and SEIS Matter

EIS and SEIS aren’t just tax schemes - they are strategic tools for business growth and wealth management.

For start-ups, the ability to offer tax relief can be the difference between securing vital capital or stalling early growth. For investors, especially high-net-worth individuals or angel syndicates, these schemes present an opportunity to support UK innovation with government-backed downside protection.

Are You Eligible for EIS or SEIS?

Business Eligibility

For EIS, your company must:

• Raise investment within 7 years from the date of your company’s first commercial sale. (10 years if knowledge-intensive)
• Be unquoted, independent, and have a permanent establishment in the UK
• Have gross assets below £15 million pre-investment and less than £16m post investment.Employ fewer than 250 full-time equivalent employees at the time the shares are issued (or 500 if knowledge-intensive)
• Be engaged in a qualifying trade,
• Meet the risk to capital condition

For SEIS, your company must:

• Raise investment within 3 years from the date of your company’s first commercial sale
• Have under £350,000 in gross assets at the time of the share issue
• Employ fewer than 25 full-time equivalent employees
• Not have previously raised investment by EIS or VCT funds

Start-ups can only use SEIS once, so timing is critical.

How Much Can Be Raised?

• EIS: Up to £5 million per year, £12 million (lifetime limit)
• SEIS: Up to £250,000 in total (lifetime limit)

Investors also have limits:

• EIS: Up to £1 million annually - or £2 million for knowledge-intensive companies
• SEIS: Up to £200,000 annually

What Tax Reliefs Are Available?

Investor Tax Reliefs

*Ignoring carried interest CGT rates

Example: A £100,000 SEIS investment could deliver up to £50,000 in Income Tax relief, £12,000 in CGT relief, and additional loss and inheritance tax benefits.

Conditions Investors Must Meet

To access tax reliefs, investors must:

• Not be employed by or “connected” to the company
• Invest for genuine commercial purposes
• Pay for ordinary, fully-paid up, non-redeemable shares
• Hold shares for a minimum of 3 years

Being "connected" can disqualify you - this includes previous employment, significant financial interests, or linked family members. It’s essential to seek professional advice before investing.

What to Consider Before Applying

Before starting your EIS or SEIS journey, consider the following:

For Businesses:

• Do you meet HMRC’s eligibility criteria?
• Are you ready to issue shares and submit filings?
• Do you have a strong business plan and financial forecasts?
• Have you considered applying for Advance Assurance from HMRC?

For Investors:

• Are you eligible to claim relief?
• Can you commit to the 3-year hold?
• Do you understand clawback risks and compliance conditions?

How Lumina Can Help

At Lumina, the specialist advisory arm of Ad Valorem, we provide expert support for businesses and investors navigating the EIS and SEIS process.

Our services include:

• Preparing and submitting Advance Assurance applications
• Creating investor-ready business plans and financial packs
• Handling HMRC post-investment filings (EIS1, EIS2, EIS3)
• Supporting accountancy firms whose clients are seeking investment or wish to invest

With decades of experience and a proactive, people-first approach, we make sure the process is clear, compliant, and focused on results.