Ready to choose between SEIS vs EIS?
SEIS vs EIS is one of the first questions founders face when raising early-stage investment. With the right support from SEIS/EIS Advance Assurance specialists, choosing the right scheme becomes far simpler.
Both schemes offer generous tax reliefs that make your company more attractive to investors. The challenge is knowing which one fits your stage, funding goals, and timelines. Get it wrong and you risk delays, rejected applications, or even losing investor interest.
This guide breaks everything down clearly. You’ll get:
- The key differences between SEIS and EIS
- A simple side-by-side comparison
- Eligibility rules for companies and investors
- Funding limits, tax reliefs, and spend deadlines
- How to use both schemes in order
- The steps to apply and secure Advance Assurance
Let’s make SEIS vs EIS easy to navigate so you can focus on raising with confidence.
Raise capital confidently with seamless SEIS and EIS compliance.
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 generous 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. EIS supports companies that are a little further along and need larger rounds to grow.
Both schemes exist to help founders raise capital. They reduce the risk for investors and make it easier for you to close a round with confidence.
SEIS vs EIS at a glance
Before you dive into the details, it helps to see the difference between SEIS and EIS side by side. These points cover the rules most founders use to decide which scheme fits their stage and funding goals.
Feature | SEIS | EIS |
Company age | Under 3 years of a new qualifying trade | Usually within 7 years of first commercial sale |
Gross assets | Up to £350,000 | Up to £15m before issue, £16m after |
Employee limit | 25 full-time employees | 250 full-time employees |
Funding cap | £250,000 total | £5m per year, £12m lifetime |
Spend deadline | Within 3 years | 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 |
This quick view gives investors clarity. It also helps you check that your company fits the right scheme before you start preparing your round.
SEIS explained: when it fits 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 a strong 50 per cent income tax relief. This makes your offer more attractive at a point when your business carries higher risk.
Company criteria under SEIS
To qualify for SEIS, your company must meet all of the following:
- A UK permanent establishment
- A new qualifying trade
- Under three years old
- Gross assets below £350,000
- Fewer than 25 full-time employees
- Not trading 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 does not 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.
EIS explained: when it fits 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 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 | Under £15m before issue, £16m after |
Employee limit | Fewer than 250 full-time 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
EIS allows you to raise up to £5 million each year, capped at £12 million over your lifetime. Investors can claim 30 per cent income tax relief, enjoy CGT-free gains after three years, and may defer existing gains by reinvesting.
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. All EIS money must be spent within two years of the investment or the start of trading.
SEIS vs EIS 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 gives investors the strongest upfront benefit. They can claim 50 per cent income tax relief and enjoy a full CGT exemption when they hold their shares for at least three years. Loss relief also applies, which helps reduce 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. They can also access loss relief and other incentives that make scaling companies more attractive.
Both schemes require full-risk ordinary shares and a minimum holding period of three years. These rules make sure the investor carries genuine commercial risk, which is central to both SEIS and EIS.
Keep investor documents simple. Clear explanations of the scheme you are 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. This helps you raise smaller, early-stage capital under SEIS before moving on to larger EIS rounds as the business grows. Getting the order right is essential, because you cannot issue SEIS shares after issuing EIS shares.
SEIS sits at the start of the journey. It covers the 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, as it keeps compliance straightforward and supports a smooth fundraising timeline.
It is worth planning your sequence early. Factors such as trading age, asset limits and spend deadlines can affect your eligibility later. If you are unsure where you stand, our guide on SEIS to raise money for your company explains how to structure an early round effectively.
How to 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. It reassures investors that your round is likely to qualify and helps you close commitments faster.
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 will spend the funds. Clear forecasts and a simple use of funds will 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 will send the certificates your investors need to claim their relief. To reduce the risk of delays, our guide on SEIS and EIS 10 common pitfalls highlights the most common errors and how to avoid them.
Efficient preparation keeps the process smooth and helps maintain investor confidence throughout your raise.If you want guided support through this stage, our SEIS and EIS Advance Assurance service helps founders get investor-ready.
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. Both schemes support investment, but each one fits a different part of the journey.
SEIS vs EIS: which scheme fits your scenario?
Scenario | Best Scheme | Why |
You are pre-revenue or early prototype | SEIS | Higher investor relief helps you attract early backing at a riskier stage |
You are 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 | Ideal for companies moving into a true scale phase |
You want to use both schemes in sequence | SEIS → 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.
If you want 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 understand SEIS vs EIS, choosing the right scheme becomes far simpler. The next step is getting your company investor-ready with clean paperwork, a clear use of funds and an Advance Assurance application that HMRC can process without delay.
This is where Sleek supports you. We help you prepare every part of your SEIS or EIS application, from checking eligibility to drafting forecasts and building a package that gives investors confidence. With the right support, you can focus on raising capital while we handle compliance.
Move through SEIS and EIS with clarity, confidence and Sleek by your side.
FAQs on SEIS vs EIS
What is the difference between SEIS and EIS?
SEIS supports very early-stage companies with higher tax relief and smaller funding limits, while EIS supports more developed businesses that need larger rounds to scale. SEIS must always come before EIS if you plan to use both schemes.
Who qualifies for SEIS vs EIS investments?
You must meet HMRC rules on company age, trade, assets and employee limits. SEIS fits younger companies with lower assets, while EIS works for companies within seven years of first commercial sale. If you work in TV or creative sectors, our guide on SEIS and EIS for TV companies explains how the rules apply to your industry.
How do SEIS and EIS support startups?
Both schemes make your raise more attractive by giving investors tax relief on new shares. This reduces their risk and can help you secure funding faster. Many early-stage founders start with a small SEIS round, then move to EIS as they scale.
Can I use both SEIS and EIS in one company?
Yes, but you must issue SEIS shares first. Once your SEIS allocation is used, later rounds can qualify for EIS as long as you remain eligible. This sequence helps you maximize reliefs and keeps your fundraising clean.
How much can I invest through SEIS or EIS?
Investors can put up to £200,000 into SEIS each year and up to £1 million into EIS. Higher allowances may apply for knowledge-intensive companies. For founders, planning your round size early helps avoid timing issues.
How do I apply for SEIS or EIS Advance Assurance?
You prepare an application that includes your business plan, financial forecasts and details of how your raise meets the risk to capital condition. This is then submitted to HMRC for review. A simple, clear structure speeds things up, and our startup business plan template can help you get started.
What are the common mistakes when applying for SEIS or EIS?
Late applications, unclear use of funds and missing documents are the most frequent issues. Mixing SEIS and EIS on the same day is another common error. Careful round planning helps you stay compliant and avoid delays.
Disclaimer: The preceding information is not legal advice. This content is aimed to provide general guidance. For more formal or legal advice, contact Sleek directly.
