SEIS and EIS Tax Relief Explained: Limits, Reliefs and April 2026 Changes (2026/27)
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SEIS, the Seed Enterprise Investment Scheme, gives investors 50% income tax relief on up to £200,000 a year invested in qualifying early-stage companies, and lets a young company raise up to £250,000 in total. Its bigger sibling, the Enterprise Investment Scheme (EIS), gives 30% relief on up to £1 million a year, or £2 million where the extra goes into knowledge-intensive companies. From 6 April 2026, the amount a company can raise under EIS has doubled.
For founders, these reliefs can make the difference between a pitch that lands and one that does not. For investors, they reduce the risk of backing a start-up. This guide sets out the 2026/27 limits, the tax reliefs on offer, the conditions companies must meet and how advance assurance works.
SEIS and EIS at a glance (2026/27)
| SEIS | EIS | |
|---|---|---|
| Income tax relief for investors | 50% | 30% |
| Investor limit per tax year | £200,000 | £1m, or £2m if at least £1m is in knowledge-intensive companies |
| Most a company can raise | £250,000 in total | £10m in any 12 months, £24m lifetime |
| Knowledge-intensive company limits | Not applicable | £20m a year, £40m lifetime |
| Company age | Trade under 3 years old | Usually within 7 years of first commercial sale |
| Gross assets | £350,000 or less | £30m before the issue, £35m after |
| Employees | Fewer than 25 | Fewer than 250 full-time equivalent |
| Minimum holding period | 3 years | 3 years |
| CGT benefit | 50% reinvestment relief, gains on the shares exempt | Deferral relief, gains on the shares exempt |
Higher-risk, earlier-stage companies get the more generous relief, which is why the seed scheme limits are much smaller.
What changed from April 2026
Budget 2025 announced the most significant changes to the EIS limits in years, effective from 6 April 2026:
| EIS company limit | Before 6 April 2026 | From 6 April 2026 |
|---|---|---|
| Annual investment limit | £5m | £10m |
| Annual limit, knowledge-intensive | £10m | £20m |
| Lifetime limit | £12m | £24m |
| Lifetime limit, knowledge-intensive | £20m | £40m |
| Gross assets before / after issue | £15m / £16m | £30m / £35m |
Income tax relief on Venture Capital Trust (VCT) investments fell from 30% to 20% at the same time. EIS relief stays at 30%, and the SEIS limits did not change. Some Northern Ireland companies trading in goods or certain electricity activities stay on the old EIS limits.
SEIS tax relief for investors
An investor in a qualifying SEIS company can claim:
- Income tax relief of 50% of the amount invested, up to £200,000 a year. The relief cannot exceed the investor’s income tax bill for the year.
- Carry back, treating the investment as made in the previous tax year.
- CGT exemption on any gain when the shares are sold, provided income tax relief was given and not withdrawn and the shares were held for at least three years.
- CGT reinvestment relief, which exempts 50% of a gain made elsewhere and reinvested in seed scheme shares, up to £100,000 of relief.
- Loss relief if the company fails, so the loss after income tax relief can be set against income.
Investors must not be “connected” with the company. Broadly, you are connected if you and your associates hold more than 30% of the shares or voting rights, or are employees. For SEIS, this is tested from the date the company was set up.
EIS tax relief for investors
EIS investors get 30% income tax relief, the same CGT exemption after three years and loss relief. Instead of reinvestment relief, EIS offers CGT deferral relief: a gain on any asset can be deferred if it is reinvested in EIS shares between one year before and three years after the disposal. The gain comes back into charge when the EIS shares are sold. Our capital gains tax advice team can help you plan a deferral.
Worked example: investing in a Bolton tech start-up
Daniel, an additional-rate taxpayer from Lostock, sold a buy-to-let flat in 2026/27 and made a £50,000 gain. He invests £50,000 in Millbank Data Ltd, a two-year-old software company in Bolton with advance assurance.
| Under SEIS | Under EIS | |
|---|---|---|
| Investment | £50,000 | £50,000 |
| Income tax relief | £25,000 (50%) | £15,000 (30%) |
| CGT saved on his property gain | £6,000 (half the gain exempt at 24%) | Gain deferred, not exempt |
| Net cost after reliefs | £19,000 | £35,000 (with CGT still to pay later) |
| If the company fails: loss relief at 45% | £11,250 on a £25,000 loss | £15,750 on a £35,000 loss |
Under the seed scheme, Daniel’s worst-case loss is around £7,750 of his original £50,000. The figures are illustrative and assume he has enough income tax to absorb the relief and keeps the shares for at least three years.
Which companies qualify?
To raise money under SEIS, the company must:
- Carry on, or be preparing to carry on, a new qualifying trade that started less than three years ago.
- Have gross assets of no more than £350,000 and fewer than 25 employees.
- Not have previously carried on a different trade, or received EIS or VCT investment.
- Issue full-risk ordinary shares paid up in cash, with no guarantees or preferential rights.
- Spend the money within three years on the qualifying trade or research and development.
EIS companies must usually be within seven years of their first commercial sale, have fewer than 250 full-time employees, meet the gross assets limits and spend the money within two years. Both schemes require a “risk to capital”: the company must aim to grow over the long term, with a real risk that investors lose money. Some trades, such as property development, banking and many asset-backed activities, are excluded.
If you are spending on innovation, check how these reliefs fit alongside R&D tax relief for the company.
Advance assurance and claiming relief
- Apply for advance assurance. HMRC will tell you whether the share issue is likely to qualify. It is optional, but most investors expect it.
- Issue the shares. Shares must be fully paid in cash when issued.
- Submit the compliance statement. For SEIS, file form SEIS1 once the company has traded for four months or spent at least 70% of the money raised. For EIS, file EIS1 after four months of trading. The deadline is two years after the end of the tax year of issue, or two years after the four-month point if that is later.
- Give investors their certificates. HMRC sends an SEIS3 or EIS3 certificate and a unique reference number.
- Investors claim. They claim through their Self Assessment return or by adjusting their tax code.
Advance assurance covers only the conditions HMRC has looked at, so it is not a guarantee. A clear business plan showing how the money will be spent makes the application easier.
Frequently asked questions
What is the difference between SEIS and EIS?
The seed scheme is for very early-stage companies and gives 50% income tax relief on up to £200,000 a year, with a £250,000 company limit. EIS is for larger, more established small companies and gives 30% relief on up to £1m a year, or £2m for knowledge-intensive companies.
Can a company use both SEIS and EIS?
Yes. A company usually raises its seed round first and then moves on to EIS for later rounds. It cannot use the seed scheme after it has already received EIS or VCT investment.
How long do I need to hold SEIS shares?
You must hold the shares for at least three years to keep the income tax relief and get the CGT exemption on a gain. Selling earlier normally means some or all of the relief is withdrawn.
Did the EIS limits change in 2026?
Yes. From 6 April 2026, the annual company limit doubled to £10m and the lifetime limit to £24m, with higher limits for knowledge-intensive companies. The investor relief rate stayed at 30%.
Is advance assurance compulsory?
No, but most investors will not commit without it. It shows HMRC’s view on key conditions before the shares are issued.
Plan your investment round with Cangaf
The rules are detailed and a mistake can cost investors their relief. Cangaf’s ACCA-qualified team works with start-up businesses in Bolton and Greater Manchester to structure share issues, apply for advance assurance and file compliance statements. We also give wider business tax advice to founders and investors. Request a fixed-fee quote to get started.
Official guidance: Tax relief for investors using venture capital schemes, Use a venture capital scheme to raise money for your company, Apply to use the Seed Enterprise Investment Scheme and EIS and VCT investment limit changes from April 2026.
