Kickstart Growth with SEIS & EIS: Your Fast-Track to Entrepreneur Tax Relief
Navigating early-stage funding can feel like a maze. That’s where SEIS and EIS schemes come in—offering generous entrepreneur tax relief to angel backers and serious incentives to startups. In plain terms: they make investing less risky and growth more possible.
This guide walks you through both SEIS and EIS, from eligibility to raising funds, plus how to leverage Oriel IPO’s commission-free funding platform, curated investment opportunities and in-depth educational tools. Ready to turn tax incentives into runway? Discover entrepreneur tax relief and revolutionise investment opportunities in the UK
What Are SEIS and EIS?
At their core, SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) are UK government programmes that deliver hefty tax breaks to those investing in qualifying start-ups and early-stage firms.
SEIS Explained
- Designed for the earliest seed rounds.
- Investors can claim 50% income tax relief on up to £100k per tax year.
- Companies can raise up to £150k (or £250k from April 2023).
- Ideal for businesses trading less than two years with fewer than 25 full-time employees.
EIS Explained
- Geared toward more established start-ups.
- Offers 30% income tax relief on investments up to £1m per tax year (or £2m for Knowledge Intensive Companies).
- Companies can raise up to £5m per year, max £12m in total.
- Requires fewer than 250 full-time employees and trading under seven years.
Key Differences at a Glance
| Feature | SEIS | EIS |
|---|---|---|
| Income tax relief | 50% of investment | 30% of investment |
| Investment limit | £100k per investor/year | £1m per investor/year |
| Company age limit | Under 2 years (3 from 2023) | Under 7 years |
| Employee cap | 25 full-time equivalents | 250 full-time equivalents |
| Gross assets threshold | £200k (£350k from 2023) | £15m before issue, £16m after |
Why Start-Ups Love SEIS & EIS
SEIS and EIS do more than just slice your investor’s tax bill. They:
- Reduce perceived risk, making pitch meetings smoother.
- Encourage long-term support via loss relief and CGT mitigation.
- Build credibility—advance assurance from HMRC signals a green light.
- Funnel experienced angels and fund managers who often bring mentoring.
For founders, this means less time convincing investors to take a chance and more time building your product. And when you use a platform like Oriel IPO, you dodge hefty commission fees—keeping more of every pound raised in your business.
SEIS & EIS Qualifying Conditions
Before you dive in, check the boxes:
Common Conditions
- Qualifying trade: Excludes banking, property development, energy generation, and a few others.
- UK base: Incorporated or permanently established in the UK.
- Risk to capital: HMRC wants genuine growth aims and real commercial risk in your forecasts.
SEIS-Specific Requirements
- Fewer than 25 employees.
- Trading for under two years.
- Gross assets under £200k.
- Not previously funded by EIS or a venture capital trust.
EIS-Specific Requirements
- Fewer than 250 employees.
- Trading for under seven years.
- Gross assets below £15m before fundraising.
- No connections to become a subsidiary or to be controlled by another company.
Meet these, and you’re ready to apply for HMRC advance assurance.
Navigating Advance Assurance: Step by Step
-
Prepare your pack
• Incorporation documents
• Unique Tax Reference (UTR)
• Business plan and forecasts
• Details of proposed investors -
Submit to HMRC
Email everything to enterprise.centre@hmrc.gov.uk.
Aim for at least one named investor in your application. -
Wait for approval
HMRC normally replies in 2–3 weeks if all’s in order (up to 45 days is possible). -
Announce your scheme
Once granted, it’s a green light for angels to invest with confidence.
Miss a document and it drags on. Plan ahead—especially around the April tax-year end when HMRC is busy.
Pitfalls to Avoid
- Issuing SEIS and EIS shares on the same day. Always do SEIS first, then EIS at least one day later.
- Using funds for excluded activities (repaying loans, buying assets to resell, unrelated trades).
- Offering shares with preference or capital preservation rights.
- Skipping advance assurance and hoping investors won’t mind.
Being thorough now saves headaches (and claw-backs) later.
How to Use the Funds Wisely
Funds under SEIS/EIS must drive your core growth. Think:
- Hiring skilled staff.
- Ramping up marketing and sales.
- Developing product features.
- Scaling production or infrastructure.
Avoid dumping cash on property, land leases or one-off asset buys. HMRC expects high risk and high growth focus.
Tracking Compliance & Securing Investor Relief
After your raise:
- Issue shareholder certificates.
- Submit SEIS1/EIS1 compliance statements (once trading for four months or 70% of funds spent).
- Distribute SEIS3/EIS3 forms so investors claim relief.
Timely filings mean investors lock in entrepreneur tax relief and stay happy.
Finding SEIS & EIS-Ready Investors
Oriel IPO’s curated marketplace matches you with angels dedicated to SEIS/EIS deals. You also can:
- Attend pitch events (look for those highlighting SEIS/EIS).
- Network via industry groups and accountancy partnerships.
- Share your advance assurance status to stand out.
Platforms that vet opportunities—like Oriel IPO—help investors act fast.
Halfway through planning your round? Simplify entrepreneur tax relief steps with Oriel IPO
Conclusion: Seize Your Tax-Efficient Funding
SEIS and EIS schemes simplify high-risk funding with generous entrepreneur tax relief. The road includes advance assurance, strict conditions and precise use of funds—but the rewards are real:
- Meaningful income tax relief.
- Capital gains deferral and exemption.
- Loss and inheritance tax relief.
Pair these with Oriel IPO’s commission-free platform, curated listings and expert resources, and you’ve got a runway for growth without the friction. Ready to maximise every pound raised and appeal directly to serious investors? Start maximising entrepreneur tax relief today with Oriel IPO
