SEIS targets very early-stage companies and delivers highly attractive tax incentives. EIS supports slightly more established growth businesses while still offering significant benefits. 

Eligibility criteria for businesses 

To be eligible for SEIS, a company generally must: 

• Be unquoted and based in the UK 
• Have gross assets of no more than £350,000 and fewer than 25 employees at the time shares are issued 
• Be trading actively for no more than three years 
• Have not raised more than £250,000 via SEIS in its lifetime 

For EIS, conditions are slightly broader: 

• Companies can be up to seven years old from their first commercial sale 
• They must still be unquoted, carry on a qualifying trade, and have not raised more than £12 million in total (or £5 million per year), including from SEIS, EIS, VCTs and similar schemes 

Tax benefits

See below the different types of tax benefits/reliefs available to individuals upon making investments through the schemes.

Income Tax Relief 

SEIS - 50% up to £200,000 per tax year 

EIS - 30% up to £1 million per year, or £2 million when part invested in knowledge-intensive companies 

Capital Gains Tax (CGT) on Disposal of Shares 

Both SEIS & EIS - Exempt after 3 years 

CGT Reinvestment Relief 

SEIS - 50% reduction on gains reinvested (cap £100,000pa) 

EIS - Deferral of gains until disposal of EIS shares

Loss Relief 

Losses can be offset against income or gains, reducing risk 

Losses offset similarly

How to claim the tax relief

You can claim tax relief on your SEIS/EIS investments through a Self-assessment tax return.

It is essential that the necessary compliance certificates have been received from the company you have invested in. These are referred to as SEIS3 or EIS3 certificates. You will also need your Unique Investment Reference.

Platforms offering SEIS/EIS Investments

Investors often access SEIS and EIS opportunities via well-known equity-crowdfunding platforms such as:

• Crowdcube: Offers SEIS and EIS-qualified campaigns, clearly labelled. It enables small-ticket investments in early-stage businesses.

• SyndicateRoom: Provides SEIS and EIS funds and allows access to avenue-specific funds for diversification

Risk considerations

It’s vital for investors to be aware that SEIS and EIS are designed to support high-risk ventures. Start-ups have high rates of failure, and reliefs rely on compliance and HMRC approval. View these schemes as part of a broader, diversified investment strategy.

Final thoughts

SEIS and EIS offer generous tax reliefs that make investing in early-stage businesses more attractive, but claiming them correctly requires the right certificates, accurate disclosure on a Self-Assessment tax return, and awareness of deadlines.

If you need assistance with making these claims, do get in touch and we will be happy to help.

Links

Crowdcube - Invest in Europe's best startups | Crowdcube

SyndicateRoom - Invest smarter and gain access to EIS and SEIS tax relief | SyndicateRoom