- SEIS gives investors 50% income-tax relief on up to £250,000 per company; EIS gives 30% on much larger rounds; both are core to why UK angels say yes.
- From 6 April 2026, EIS annual company limits doubled to £10m (£20m for knowledge-intensive companies), and the scheme runs until at least 2035.
- Get HMRC Advance Assurance 6–8 weeks before close; most angels will not fund without it.
- Don't raise on a US-style SAFE: it can void SEIS/EIS relief. Use a priced round or a correctly drafted ASA with a 6-month longstop.
- The round isn't really done until you've issued SEIS3/EIS3 certificates; that's what lets investors claim.
On this page
- Why SEIS and EIS decide whether angels say yes
- SEIS in 2026: the numbers that matter
- EIS in 2026: bigger limits from April
- Does your company actually qualify?
- Advance Assurance: the step founders skip
- The instrument trap: how a US SAFE can void your relief
- After the raise: staying compliant
- Finding SEIS/EIS-friendly investors
Why SEIS and EIS decide whether angels say yes
SEIS (the Seed Enterprise Investment Scheme) and EIS (the Enterprise Investment Scheme) are UK government schemes that give investors generous income-tax and capital-gains reliefs for backing early-stage companies. For the founder, they double as a sales tool: they de-risk the cheque so much that many active UK angels simply will not invest in a company that cannot offer them.
SEIS gives investors 50% income tax relief; EIS gives 30%. Once you stack loss relief on top, a £10,000 SEIS investment can put as little as ~£2,750 of real capital at risk for a higher-rate taxpayer. That asymmetry is why “Are you SEIS-eligible?” is one of the first questions a UK angel asks.
The two schemes are designed to be used in sequence. A company typically raises its first chunk (up to £250,000) under SEIS, then moves to EIS for larger rounds. You can use both, but on any given share issue SEIS must come first, and you generally need to have spent 70% of the SEIS money before issuing EIS shares.
SEIS in 2026: the numbers that matter
The SEIS limits were expanded on 6 April 2023 and remain in force in 2026.
| Rule | Limit |
|---|---|
| Company can raise | £250,000 (lifetime, across all SEIS) |
| Investor limit | £200,000 per tax year |
| Income tax relief | 50% of the amount invested |
| Company age | Under 3 years (new qualifying trade) |
| Gross assets | £350,000 or less at share issue |
| Employees | Fewer than 25 |
| Holding period | Shares held 3+ years for CGT exemption |
Beyond the 50% income-tax relief, SEIS stacks three more reliefs you should be able to explain to an investor: 50% capital-gains reinvestment relief (halve the CGT on a gain you roll into SEIS shares), a full CGT exemption on SEIS shares held three years, and loss relief if the company fails.
On a £10,000 SEIS investment, a higher-rate investor claims £5,000 income-tax relief immediately. If the company later fails and the shares become worthless, loss relief on the remaining £5,000 at 45% returns a further ~£2,250, so the real money at risk was about £2,750. If it succeeds, any gain after three years is capital-gains-tax free.
“Are you SEIS-eligible?” is one of the first questions a UK angel asks. Get it wrong and the conversation is over before your traction slide.
EIS in 2026: bigger limits from April
EIS is the scheme for everything after SEIS. The big news for 2026 is that the EIS company limits were restructured upward from 6 April 2026, and the sunset clause was already extended to 2035, so the scheme is here for the long run.
| Limit | Before | From 6 Apr 2026 |
|---|---|---|
| Annual raise (standard) | £5m | £10m |
| Annual raise (knowledge-intensive) | £10m | £20m |
| Lifetime raise (standard) | £12m | £24m |
| Lifetime raise (knowledge-intensive) | £20m | £40m |
| Gross assets before issue | £15m | £30m |
| Gross assets after issue | £16m | £35m |
For a pre-seed or seed founder these ceilings rarely bind; you are nowhere near £10m a year. What they signal is that EIS now stretches much further up the funding ladder, so the relief follows your investors into Series A and beyond.
- 30% income tax relief for the investor.
- Investors can put in up to £1m per year (£2m if at least £1m goes into knowledge-intensive companies).
- Company must be under 7 years old from first commercial sale (10 for KICs) for a first EIS investment.
- Fewer than 250 employees (500 for KICs).
- CGT deferral on gains reinvested, and tax-free gains on EIS shares held 3+ years.
Separately, Venture Capital Trust income-tax relief dropped from 30% to 20% for new VCT shares from April 2026. If a fund tells you it invests “via a VCT”, that change affects them; it does not change your EIS allocation.
Does your company actually qualify?
Both schemes share a backbone of conditions. Run this checklist before you promise an investor anything.
- A UK permanent establishment.
- Carrying out a qualifying trade: most trades qualify, but the excluded list includes dealing in land, financial activities, leasing, legal and accountancy services, property development, farming, running hotels, and energy generation.
- Raising money for growth and development, spent within the time limit (SEIS: 3 years; EIS: 2 years).
- Not controlled by another company.
- Gross assets and employee counts under the limits above.
- Not “in difficulty” and free of disqualifying arrangements.
A surprising number of fundable startups sit near an excluded activity: fintech that drifts into “lending”, a marketplace that looks like “dealing”, a proptech that edges into “development”. If revenue comes substantially from an excluded trade, relief can be refused. Get a specialist to sanity-check borderline models before you file.
Advance Assurance: the step founders skip
Advance Assurance is HMRC's pre-approval that your company looks eligible. It is not legally required, but in practice most UK angels will not wire funds without it. It is their evidence the relief will be honoured.
- 1Prepare the pack: business plan, financial forecasts, an up-to-date cap table, articles of association, and details of the shares you will issue.
- 2Name at least one prospective investor; HMRC now expects this, not a blank application.
- 3Submit online via HMRC's venture capital schemes service.
- 4Wait: turnaround typically runs several weeks, so start before you need the money.
- 5Receive the assurance letter and add it to your data room for investors.
Apply for Advance Assurance 6–8 weeks before you want to close. The single most common avoidable delay in a UK pre-seed round is a founder starting the SEIS paperwork after the term sheet, then watching angels wait on HMRC.
The instrument trap: how a US SAFE can void your relief
This is the mistake that costs founders the most. SEIS and EIS relief attaches to newly issued ordinary shares. The instrument you take investment on has to result in those shares being issued on qualifying terms, and the popular US “SAFE” usually does not.
| Instrument | SEIS/EIS compatible? | Why |
|---|---|---|
| Priced equity round | Yes | Shares are issued immediately on ordinary terms. |
| ASA (Advanced Subscription Agreement) | Yes, if drafted correctly | UK instrument: must be non-refundable, carry no interest, and convert to shares within 6 months. |
| SAFE (US-style) | Usually no | Often refundable, can resemble a loan, and may convert too far in the future; each breaks the rules. |
If you raise on a SAFE copied from a US accelerator, you may quietly disqualify your investors from SEIS/EIS, and they will find out at the worst time. In the UK, use a priced round or a properly drafted ASA. The longstop on an ASA must be no more than six months and the money must not be repayable.
After the raise: staying compliant
Relief is not real until the paperwork lands. Once you have issued the shares and traded for the minimum period, you file the compliance statement and issue certificates.
- 1Issue the shares and update your cap table and statutory registers.
- 2Wait until the company has traded for at least four months.
- 3Submit the SEIS1 / EIS1 compliance statement via HMRC's online service.
- 4Receive HMRC's authorisation (SEIS2 / EIS2) with a unique reference.
- 5Issue SEIS3 / EIS3 certificates to each investor: the document they need to claim.
Investors cannot claim a penny until you hand them the SEIS3 / EIS3. Treat issuing those certificates as the real close of the round, not the day the money lands.
Finding SEIS/EIS-friendly investors
Knowing the rules is half the job. The other half is pitching investors who actually deploy into SEIS/EIS companies at your stage, because plenty of UK funds and angels structure entirely around these reliefs, and plenty do not touch them.
This is where most founders waste weeks. Rather than emailing every investor to ask “do you do SEIS?”, SeedPilot matches you to UK investors based on the companies they have actually funded, including the early-stage angels and seed funds whose whole model is built on SEIS and EIS. You start the conversation already knowing the relief fits their mandate.
Frequently asked questions
Can a company use both SEIS and EIS?+
Yes. Companies typically raise their first ~£250,000 under SEIS, then use EIS for larger rounds. On a single share issue SEIS must be used before EIS, and you generally need to have spent 70% of the SEIS money before issuing EIS shares.
How much can a startup raise under SEIS?+
Up to £250,000 in total under SEIS, a lifetime cap in place since April 2023. Individual investors can claim relief on up to £200,000 invested per tax year.
Is a SAFE SEIS/EIS eligible in the UK?+
Usually not. Standard US SAFEs often include refund or loan-like terms and can convert too far in the future, which breaks SEIS/EIS rules. UK founders should use a priced equity round or a properly drafted Advanced Subscription Agreement (ASA) with a longstop of no more than six months.
Do I legally need Advance Assurance?+
No, but in practice most UK angels require it before investing because it is their assurance the relief will be granted. It is strongly recommended.
When can my investors claim their tax relief?+
Only after you issue them an SEIS3 or EIS3 certificate, which you can do once the company has traded for at least four months and you have filed the SEIS1/EIS1 compliance statement with HMRC.
Now find the investors who'll actually back you.
SeedPilot matches you to UK investors who actually fund companies like yours, on verified data rather than what their website claims. Free, 90 seconds, no email.
- What UK investors actually want in 2026: the three questions behind every yes →
- UK term-sheet red flags in 2026: the clauses that quietly cost founders →
- How to get warm investor intros when you have zero network →
- SEIS/EIS Advance Assurance in 2026: getting it right the first time →
- How to raise a UK pre-seed round in 2026: valuations, instruments, and a timeline that works →
Editorial guidance for UK founders — current as of 28 May 2026, and not legal, tax, or financial advice. Tax rules change and depend on your circumstances; confirm against the linked HMRC guidance and take professional advice before acting.