- SEIS gives investors 50% income tax relief; EIS gives 30%.
- SEIS caps your raise at £250,000; EIS allows up to £10 million a year.
- You must issue SEIS shares before EIS shares, never after.
SEIS vs EIS comes down to stage: SEIS gives investors 50% income tax relief on a company’s first £250,000, while EIS gives 30% on rounds of up to £10 million a year. Most startups raise under SEIS first, with SEIS/EIS advance assurance in place before they pitch. This guide covers eligibility, limits, investor reliefs and how to use both.
What are SEIS and EIS?
The Seed Enterprise Investment Scheme and the Enterprise Investment Scheme are government-backed incentives that help early-stage companies raise money. They reward investors with tax reliefs when they buy new ordinary shares in qualifying startups.
SEIS is built for the earliest stage of your journey. It gives investors stronger tax relief because your business is young and higher risk, while EIS supports companies that are a little further along and need larger rounds to grow.
Both schemes reduce the risk for investors and make it easier for you to close a round. Our guide to SEIS and EIS benefits sets out what each scheme gives your investors and your company.
How do SEIS and EIS compare at a glance?
Before you get into the detail, it helps to see the difference between SEIS and EIS side by side. These are the rules most founders use to decide which scheme fits their stage and funding goals.
| Feature | SEIS | EIS |
|---|---|---|
| Company age | Trade under 3 years old | Usually within 7 years of first commercial sale |
| Gross assets | Up to £350,000 | Up to £30m before issue, £35m after |
| Employee limit | Fewer than 25 full-time equivalents | Fewer than 250 full-time equivalents |
| Funding cap | £250,000 total | £10m a year, £24m lifetime |
| Spend deadline | Within 3 years of the share issue | Within 2 years of investment or trading start |
| Scheme order | Must come before EIS | Can follow SEIS |
| Investor relief | 50% income tax relief | 30% income tax relief |
The EIS limits rose on 6 April 2026, so older guides quoting £5 million a year or £15 million in gross assets are out of date. Use this view to check your company fits the right scheme before you start preparing your round.
When does SEIS fit, and who qualifies?
SEIS is built for companies at the very start of their journey. It helps you raise smaller, early-stage rounds by giving investors 50 per cent income tax relief, which makes your offer more attractive while your business carries higher risk.
Company criteria under SEIS
To qualify for SEIS, your company must have:
- A UK permanent establishment
- A new qualifying trade that’s under three years old
- Gross assets below £350,000 when the shares are issued
- Fewer than 25 full-time equivalent employees
- No trade in excluded activities such as banking, insurance, leasing or property development
- A structure that meets the risk to capital condition
Most early-stage tech and product-led companies qualify, as long as you meet the growth and risk requirements.
SEIS funding limits and tax reliefs
SEIS allows you to raise up to £250,000 in total. Investors benefit from:
- 50 per cent income tax relief
- CGT exemption after a three-year holding period
- Loss relief if the company doesn’t perform
You can see a full breakdown in our guide to SEIS tax relief.
How SEIS funds must be used
SEIS money must support company growth. You can spend it on:
- A qualifying trade
- Preparing to trade
- R&D that leads to a qualifying activity
All SEIS funds must be spent within three years of the share issue.
When does EIS fit, and who qualifies?
EIS supports companies that have moved past the earliest stage and need larger rounds to scale. It helps you attract investors with 30 per cent income tax relief and much higher funding limits than SEIS.
EIS company criteria at a glance
| Requirement | EIS rule |
|---|---|
| Location | UK permanent establishment |
| Trade | Must carry out a qualifying trade |
| Company age | Usually within 7 years of first commercial sale |
| Gross assets | No more than £30m before issue, £35m after |
| Employee limit | Fewer than 250 full-time equivalent employees |
| Excluded sectors | Banking, insurance, leasing, property development and others |
| Risk to capital | Must raise funds for long-term growth with genuine investor risk |
EIS limits and investor tax reliefs
Most companies can raise up to £10 million a year under EIS, capped at £24 million over the company’s lifetime, with higher limits for knowledge-intensive companies. Investors can claim 30 per cent income tax relief, get CGT-free gains after three years, and may defer existing gains by reinvesting.
Our guide to EIS tax relief explains how investors claim each of these.
How EIS funds must be used
EIS funds must support growth. You can use them for a qualifying trade, preparation to trade or R&D that leads to commercial development, and all EIS money must be spent within two years of the investment or the start of trading.
What does SEIS vs EIS mean for investors?
Investors view SEIS vs EIS through the lens of risk, tax relief and long-term return. Both schemes reward early backing, but the incentives differ in strength.
SEIS tax relief gives investors the strongest upfront benefit: 50 per cent income tax relief and a full CGT exemption when they hold their shares for at least three years. Loss relief also applies, which reduces the downside of early-stage investment.
EIS supports larger commitments. Investors receive 30 per cent income tax relief and exemption from CGT on gains after three years, plus loss relief and CGT deferral.
Both schemes require full-risk ordinary shares and a minimum holding period of three years, so the investor carries genuine commercial risk. For quick answers on share classes and reliefs, see our investor scheme FAQs.
Keep investor documents simple. A clear explanation of the scheme you’re using can speed up commitments and help close your round faster.
Can you use SEIS and EIS together?
Many founders use SEIS and EIS in sequence. You raise smaller, early-stage capital under SEIS, then move on to larger EIS rounds as the business grows.
Getting the order right matters, because once you’ve issued EIS shares you can’t issue SEIS shares. SEIS covers your first £250,000 of funding and helps you secure early investor confidence.
Once your SEIS allocation is used, future rounds can qualify for EIS as long as you still meet the criteria. Most startups follow this path, because it keeps compliance straightforward.
It’s worth planning your sequence early. Trading age, asset limits and spend deadlines can all affect your eligibility later, and our guide on SEIS to raise money for your company explains how to structure an early round.
How do you apply for SEIS or EIS and get advance assurance?
The SEIS vs EIS process is far smoother when you know the steps HMRC expects. Most founders begin with advance assurance, which reassures investors that your round is likely to qualify.
Start by checking that you meet the eligibility rules for the scheme you plan to use. Confirm your trading activity, company age, asset limits and how you’ll spend the funds, because clear forecasts and a simple use of funds strengthen your application.
Once your round closes, issue full-risk ordinary shares and complete the compliance statement for HMRC, which is SEIS1 or EIS1. After review, HMRC sends the certificates your investors need to claim their relief.
Want an accountant to handle this?
Once you know the difference between SEIS and EIS, the application is where most delays start. HMRC wants your business plan, forecasts, articles of association and a clear risk to capital case before it gives advance assurance.
If your round is small and your cap table is simple, you can apply yourself through GOV.UK. If you’d rather hand it over, Sleek’s accountants check your eligibility, then prepare and submit the full SEIS and EIS advance assurance pack through our advance assurance service.
Pre-revenue companies can add a startup accountant to keep the books investor-ready. Once you’re trading, a limited company accountant handles your year-end and corporation tax alongside your SEIS or EIS compliance.
SEIS vs EIS: which scheme is best for your business?
Choosing between SEIS and EIS depends on how early you are, how much you need to raise and the type of growth you want to fund. Each scheme fits a different part of the journey.
SEIS vs EIS: which scheme fits your scenario?
| Scenario | Best scheme | Why |
|---|---|---|
| You’re pre-revenue or at early prototype | SEIS | Higher investor relief helps you attract early backing at a riskier stage |
| You’re building your first team | SEIS | Fits younger companies with fewer employees and smaller assets |
| You only need up to £250k to get started | SEIS | Designed for smaller rounds at the start of your journey |
| You have early traction or first customers | EIS | Supports bigger raises to help you scale |
| You need more than £250k to grow | EIS | Higher annual and lifetime caps support larger plans |
| You plan to expand into new markets | EIS | Suits companies moving into a true scale phase |
| You want to use both schemes in sequence | SEIS then EIS | SEIS must always come first, then EIS for later rounds |
SEIS is the better fit when your company is young, light and focused on building its foundations. EIS becomes the right choice once you have traction, customers or the need for a larger raise.
For a clearer view of your future funding needs, our guide to financial forecasting in the UK can help you set realistic targets and timelines.
How Sleek helps with SEIS vs EIS
Once you’ve settled SEIS vs EIS, the next step is getting your company investor-ready with clean paperwork, a clear use of funds and an application HMRC can process without delay. Sleek’s accountants handle your SEIS and EIS advance assurance from the eligibility check to the investor certificates, so you can spend your time on the raise itself.
Get SEIS vs EIS sorted with a dedicated Sleek accountant
FAQs on seis vs eis
Can my accountant do this for me?
Yes. An accountant can check your eligibility, prepare the business plan and forecasts HMRC asks for, and submit the application on your behalf. HMRC accepts a compliance statement from an agent who provides a signed letter of authority dated within the last three months. Sleek’s accountants do this through our SEIS and EIS application support.
How much can each investor put in under SEIS or EIS?
An investor can claim SEIS relief on up to £200,000 a year and EIS relief on up to £1 million a year. The EIS cap rises to £2 million if at least £1 million of it goes into knowledge-intensive companies, according to HMRC’s investor relief guidance. These limits apply per investor, separately from the amount your company can raise.
When can I submit the SEIS1 or EIS1 compliance statement?
For EIS1, you can submit once your company has carried out its qualifying business activity for four months, and you must do it within two years of that date or two years from the end of the tax year the shares were issued, whichever is later. For SEIS1, you can submit once you’ve traded for four months or spent at least 70% of the money raised. You need a separate statement for each share issue, as set out in HMRC’s SEIS guidance.
What happens if my company stops qualifying after the raise?
You must follow the scheme rules for at least three years after the investment, or HMRC can withhold or withdraw your investors’ relief. Under EIS, you also have to tell HMRC within 60 days if your company no longer meets the conditions. Check with your accountant before any major change to your share structure or trade during that period.
