Are you preparing to raise investment for your UK tech startup in 2026?
Your investors may ask about your product, market and growth strategy. But before they examine every feature, many angel investors will ask a more practical question:
Can this investment qualify for SEIS or EIS relief?
For an investor, the answer can materially change the risk and potential reward of backing your company. That is why SEIS vs EIS 2026 planning is not a paperwork exercise to complete after your funding round. It is part of making your raise more attractive from the outset.
The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) give qualifying investors valuable tax incentives for investing in smaller, higher-risk companies. If your startup qualifies, these schemes could help you unlock funding, build investor confidence and keep your raise moving.
But eligibility depends on more than being an early-stage business with an innovative idea.
Investing in a startup is inherently risky. Your company may still be developing its product, proving demand or building recurring revenue. Investors know that some businesses will succeed whilst others may fail.
SEIS and EIS help address that risk by offering investors tax relief if specific conditions are met.
According to HMRC’s latest SEIS and EIS statistics, UK companies raised:
For a tech startup, this is encouraging. But investors will still expect you to demonstrate that your proposed share issue is structured correctly and that your company is likely to meet the relevant conditions.
The key distinction is simple:
Both schemes can make your investment round more appealing, but the company limits and investor reliefs differ.
| Feature | SEIS | EIS |
|---|---|---|
| Investor income tax relief | 50% of qualifying investment | 30% of qualifying investment |
| Annual investor investment limit | £200,000 | £1 million, or £2 million for qualifying knowledge-intensive companies |
| Company fundraising limit | £250,000 over the company’s lifetime | £10 million in any 12-month period and £24 million lifetime limit across relevant venture capital schemes |
| Gross assets limit | £350,000 before investment | £30 million before and £35 million after investment |
| Employee limit | Fewer than 25 full-time equivalent employees | Fewer than 250 full-time equivalent employees |
| Typical company age limit | Under 3 years from the first commercial sale | Under 7 years from the first commercial sale, or 10 years for knowledge-intensive companies |
These are headline figures for 2026. Your company’s exact position will depend on its trading history, group structure, previous funding and the proposed share issue.
SEIS offers investors income tax relief of up to 50% of their qualifying investment, subject to the annual limit of £200,000.
For example, an investor who subscribes £50,000 for qualifying SEIS shares could potentially claim £25,000 of income tax relief: provided they have sufficient UK income tax liability and meet the other conditions.
EIS offers income tax relief of up to 30% of a qualifying investment. The standard annual investment limit is £1 million, increasing to £2 million where at least £1 million is invested in knowledge-intensive companies.
This is one reason investors may prioritise SEIS opportunities. The relief is more generous, although SEIS companies are subject to tighter age, asset and fundraising limits.
Both SEIS and EIS can provide valuable capital gains tax benefits.
If the investor claims the relevant income tax relief and holds the shares for at least three years, gains on qualifying shares can generally be exempt from capital gains tax.
SEIS also offers SEIS reinvestment relief, which can exempt up to 50% of a separate capital gain where that gain is reinvested into qualifying SEIS shares.
EIS generally provides capital gains tax deferral relief. This postpones the tax on a gain that is reinvested into EIS shares, rather than permanently cancelling it.
No investor relief scheme removes the commercial risk of investing in a startup. But loss relief can soften the downside.
If a qualifying investment is sold at a loss: or the company fails: the investor may be able to set the net loss against income or capital gains. The calculation takes account of any income tax relief already claimed.
In reality, this combination of income tax relief, CGT benefits and loss relief can significantly improve the risk profile from an investor’s perspective.
That is the commercial value of SEIS and EIS for your raise.
The SEIS EIS eligibility tests are detailed, but the main areas are clear.
Your startup must conduct a qualifying trade with genuine growth and development potential. Certain activities are excluded or restricted, including some financial services, property development, farming, leasing and energy-generation activities.
There is also a risk-to-capital condition. In HMRC’s eyes, the investment must be genuinely at risk and intended to support long-term growth: not simply provide investors with a low-risk return.
A common misconception is that the age test starts on the date your company was incorporated.
For SEIS and EIS purposes, the relevant date is generally linked to the company’s first commercial sale. That means a company incorporated several years ago may still need careful analysis if it has only recently started trading: but you cannot assume this without reviewing the facts.
SEIS companies must generally have no more than £350,000 in gross assets immediately before the share issue and fewer than 25 full-time equivalent employees.
EIS companies can be significantly larger, with gross assets of up to £30 million before investment and £35 million immediately afterwards, alongside a limit of fewer than 250 full-time equivalent employees.
Group companies and subsidiaries can affect these calculations. Your balance sheet and corporate structure need to be reviewed together.
The company must not be controlled by another company in a way that breaches the scheme rules. Investors may also be disqualified if they, together with connected persons, hold or control 30% or more of the company.
Employees, directors and connected persons are subject to additional rules. An investor who is also a founder, director or employee may not receive relief automatically.
This is where early advice becomes crucial.
HMRC advance assurance is an indication that HMRC considers a proposed share issue likely to qualify for SEIS or EIS, based on the information submitted.
It is not a guarantee. However, many investors want to see advance assurance before committing funds.
HMRC’s 2026 statistics show that it received:
The application normally needs to explain:
A vague application can delay your round or create unnecessary questions. A well-prepared application gives investors a clearer basis for proceeding.
Even when a company appears eligible, technical mistakes can cause serious problems.
Watch for these common issues:
Issuing shares before confirming the structure. The share rights, subscription terms and timing must be reviewed carefully before completion.
Using investment funds for non-qualifying purposes. SEIS and EIS money generally needs to support the growth and development of the qualifying trade. Repaying certain loans or acquiring another business may create problems.
Misunderstanding the first commercial sale date. This can lead a founder to claim SEIS when the company has already exceeded the age limit.
Ignoring connected investor rules. Founders, directors, employees and family members can have different eligibility considerations.
Failing to monitor the cap table. Changes in share ownership, control rights or group structure can affect qualification.
Missing post-investment compliance. After the investment, your company must submit the appropriate compliance statement to HMRC. Investors then need the relevant certificates to claim relief.
Assuming advance assurance is a guarantee. The actual share issue must match the information submitted. Material changes can affect the outcome.
The consequences can be significant. Investors may lose confidence, delay completion or reconsider the size of their commitment.
The strongest approach is to review SEIS and EIS before you approach investors: not after you have agreed the commercial terms.
At Price & Accountants, we help UK startups review their share structure, prepare financial information, plan investment rounds and set up SEIS/EIS processes as part of a wider growth journey. You can learn more about how we work with start-up companies, including support before and after investment.
We can also help you connect the funding plan with:
The goal is not simply to obtain a document from HMRC. It is to give investors confidence that your company understands its obligations and is ready to use their capital effectively.
If your company is under three years from its first commercial sale, has gross assets below £350,000 and is raising up to £250,000, SEIS may be the most attractive starting point.
If you have used your SEIS capacity or grown beyond the SEIS limits, EIS may provide the larger funding route for your next round.
But the right answer depends on your facts: not just your pitch deck.
Are you preparing a seed round, reviewing your cap table or speaking with investors who expect SEIS or EIS advance assurance? We encourage you to contact Price & Accountants before the round is finalised. With the right planning, your funding structure can become a powerful signal of confidence: and help your startup move from an ambitious idea towards its next stage of growth.
This article is for general information only and does not constitute personal tax or investment advice. SEIS and EIS rules are complex and can change. Your company and investors should obtain advice based on their individual circumstances before proceeding.
