SEIS vs EIS: UK Startup Tax Relief

Last updated: 31 October 2026

SEIS and EIS are HMRC venture capital schemes. They give income tax relief to individuals investing in qualifying small UK companies, with different limits for early-stage and later companies.

What are SEIS and EIS?

Both schemes are HMRC venture capital schemes. They give tax reliefs to individuals who invest in qualifying small UK companies. SEIS is for the earliest stage. EIS is for larger, later companies. A company that has received EIS investment cannot use SEIS.

The schemes are aimed at companies that meet HMRC conditions. Investors must also meet the conditions for relief. Readers should check HMRC guidance or take advice before relying on any tax relief.

SEIS vs EIS: rates and limits

The table below sets out the main rates and limits.

Item	SEIS	EIS
Income tax relief	50%	30%
Investor annual limit	£200,000	£1 million, rising to £2 million if at least £1 million goes into knowledge-intensive companies
Holding period	At least 3 years	At least 3 years
Company raise	Max £250,000	Up to £10 million in any 12 months and £24 million over the company’s lifetime (knowledge-intensive companies can raise more)
Gross assets	Not over £350,000 when shares issued	Not more than £30 million before and £35 million after
Employees	Fewer than 25 full-time equivalent	Fewer than 250
Company age	Trade not carried on for more than 3 years	Within 7 years of first commercial sale

SEIS has the higher income tax relief rate. It also has the lower company limits. EIS has the lower relief rate. It allows larger raises and larger companies.

The investor limits are set per tax year. The company limits depend on the scheme and, for EIS, on whether the company is knowledge-intensive. The holding period is at least 3 years for both schemes.

What other reliefs apply to investors?

For SEIS, there is no capital gains tax on a gain from selling the shares if they are held for 3 years and the income tax relief was not withdrawn. Loss relief is available.

For EIS, capital gains tax can be deferred if a gain from any asset is invested in a qualifying company. The investment must be made between one calendar year before and 3 calendar years after the sale. EIS loss relief allows a loss, less income tax relief already given, to be set against income. This can be done in the year of sale or the previous tax year.

Claims can be made up to 5 years after the 31 January following the tax year of investment. Readers should check HMRC guidance or take advice on how and when to claim.

What must the company do?

The company submits a compliance statement to HMRC before investors can claim. For SEIS, this is form SEIS1. SEIS money must be spent within 3 years of the share issue.

These steps matter because investor relief depends on the company meeting the scheme rules. A company should check the HMRC guidance before issuing shares or spending funds.

Do convertible notes qualify?

Goodwin says that for investors seeking SEIS or EIS relief, a convertible loan note “will not be appropriate”.

Frequently asked questions

Can a company that has raised under EIS use SEIS?

A company that has received EIS investment cannot use SEIS. SEIS is for the earliest stage and EIS is for larger, later companies.

What income tax relief applies?

SEIS gives 50% income tax relief. EIS gives 30% income tax relief.

How long must shares be held?

The holding period is at least 3 years for both SEIS and EIS. For SEIS, no capital gains tax applies to a gain from selling the shares if they are held for 3 years and the income tax relief was not withdrawn.

What is the EIS raise limit?

EIS allows a company to raise up to £10 million in any 12 months and £24 million over the company’s lifetime. Knowledge-intensive companies can raise more.

Do convertible loan notes qualify for SEIS or EIS relief?

According to Goodwin, a convertible loan note “will not be appropriate” for investors seeking SEIS or EIS relief. Readers should check HMRC guidance or take advice.

Sources

Figures and prices were checked on 31 October 2026; check the linked sources before relying on them. This article is general information, not tax, legal or investment advice.