Is my startup eligible for SEIS?
By SuLe · Updated 16 June 2026
Your startup can raise under SEIS if its qualifying trade is less than 3 years old, its gross assets are £350,000 or less immediately before the share issue, it has fewer than 25 full-time equivalent employees and its activities are not on HMRC's excluded list. It must also pass the risk-to-capital condition — long-term growth objectives, investors' money at risk — and can raise at most £250,000 lifetime.
Key facts
- Gross assets: £350,000 or less immediately before the share issue.
- Team: fewer than 25 full-time equivalent employees.
- Age: the qualifying trade must be less than 3 years old.
- Lifetime cap: £250,000 under SEIS, spent on the qualifying trade within 3 years of issue.
- Excluded activities (property development, banking, dealing in shares and more) must not be a substantial part of the trade — HMRC treats around 20% as substantial.
What are the headline SEIS limits?
Three numbers and a date: gross assets of £350,000 or less immediately before the issue; fewer than 25 full-time equivalent employees; no more than £250,000 raised under SEIS ever; and a qualifying trade less than 3 years old.
Note when each is measured: the asset test bites immediately before the issue, the lifetime cap counts every SEIS issue ever made, and the age test follows the trade, not the incorporation date.
The figures date from the April 2023 uplift — confirm them in HMRC's SEIS guidance before you raise.
Which trades are excluded?
Most product and service startups qualify, but HMRC's excluded list is long: dealing in land or shares, banking, insurance and moneylending, legal and accountancy services, property development, farming and woodlands, hotels, nursing homes, coal and steel, shipbuilding, and energy generation.
Royalties and licence fees are also excluded unless they come from self-created IP — the carve-out that keeps most software companies safe: licensing code you wrote is fine, reselling someone else's is not.
A trade only fails if excluded activities are a substantial part of it, and HMRC treats around 20% as substantial. Mixed businesses near that line need advice before promising investors relief.
What is the risk-to-capital condition?
A Finance Act 2018 gateway test applied on top of the limits above: the company must have objectives to grow and develop long-term, and the investment must carry a significant risk that investors lose more capital than the net return.
In practice it is a business plan question: HMRC wants genuine growth ambition — product, team, market — not a vehicle built to hold assets or return capital safely.
Pre-arranged exits and capital protection are barred outright — any structure promising investors a route to their money back fails before it starts.
Do the shares and investors have to qualify too?
Yes — eligibility is three-sided: company, shares, investor. The shares must be new ordinary shares, full-risk, paid up in full in cash at issue, with no preferential rights to assets on a winding up.
On the investor side, anyone holding more than 30% of the shares, votes or capital — counting their associates — cannot claim, and employees cannot claim — though directors can.
Each investor can put in up to £200,000 per tax year at 50% relief, holding the shares for 3 years or the relief is withdrawn.
What else should I check before promising SEIS?
This page covers the headline tests, but HMRC's full guidance adds further company conditions — for example around group structures and where the business operates — so check it or take advice before telling investors the round qualifies.
Also look forward: the money must be spent on the qualifying trade within 3 years, and status can be lost within that window — by ceasing the trade, excluded activities becoming substantial, acquisition, repaying share capital or an investor receiving value.
Most rounds settle doubt early via advance assurance — HMRC's non-statutory pre-clearance, which most angels require anyway.
| Condition | SEIS test |
|---|---|
| Trade age | Less than 3 years old |
| Gross assets | £350,000 or less immediately before the issue |
| Employees | Fewer than 25 full-time equivalents |
| Lifetime SEIS raised | £250,000 maximum, this round included |
| Activities | Not excluded — or excluded activities below a substantial (~20%) part of the trade |
| Growth test | Risk-to-capital condition: long-term growth objectives, capital genuinely at risk |
| Shares | New ordinary shares, full-risk, paid up in full in cash at issue |
| Use of money | Spent on the qualifying trade within 3 years |
Worked example
Marta and Deji run a warehouse-robotics startup. The trade began 20 months ago, gross assets are £140,000, and the team is 11 full-time equivalents — inside every limit. Their trade is not excluded, and the self-created IP carve-out covers their software licence fees.
Last year an ASA converted into a £50,000 SEIS share issue, so their lifetime headroom is £200,000. They raise exactly that from three angels, who share £100,000 of income tax relief at 50%.
Their spending plan — engineers and prototypes — keeps the money in the qualifying trade well inside the 3-year deadline.
Where founders go wrong
Measuring gross assets at the wrong moment
— the £350,000 test applies immediately before the share issue, so a grant or loan landing first can tip you over.Ignoring excluded activities inside a mixed business
— around 20% is HMRC's marker for substantial; a side revenue line in property or lending can poison an otherwise qualifying trade.Confusing company age with trade age
— the 3-year test follows the qualifying trade; when it actually began is a question of fact, not the incorporation date.Raising EIS first
— SEIS shares must be issued before EIS shares, so take the SEIS money at the start or lose the 50% option for good.
Related questions
Which trades are excluded from SEIS?
The excluded list includes dealing in land or shares, banking, insurance and moneylending, legal and accountancy services, property development, farming, hotels, nursing homes, coal and steel, shipbuilding, energy generation, and receiving royalties or licence fees unless they come from self-created IP. Excluded activities must not be a substantial part of the trade. [More: Which trades are excluded from SEIS and EIS?]
Can founders claim SEIS relief on their own shares?
Directors can claim under SEIS — unlike EIS, where paid directors are generally excluded. The catch is the connection rule: anyone holding more than 30% of the shares, votes or capital, counting their associates, cannot claim, and employees cannot claim at all. That combination excludes most founders in practice. [More: Can founders or directors claim SEIS relief on their own shares?]
Do we need advance assurance before raising?
It is not legally required — advance assurance is non-statutory pre-clearance — but most angels will not invest without HMRC's letter. Applications need details of the company, your plans for the money and your expected investors, and as of mid-2026 they typically take several weeks to process. [More: How do I get SEIS/EIS advance assurance?]
How much can each investor put in under SEIS?
Up to £200,000 per investor per tax year, attracting 50% income tax relief. The shares must be new ordinary shares, full-risk and paid up in full in cash at issue, and the investor must hold them for 3 years or the income tax relief is withdrawn. [More: What is SEIS and how does it work?]
Most SEIS eligibility failures are mundane — a mistimed asset test, a forgotten earlier share issue, a revenue line nobody checked against the excluded list — and they surface after investors have wired money. A SuLe solicitor can run the tests against your actual numbers first. Book a free SEIS/EIS readiness call and find out where you stand.
Keep reading: What is SEIS and how does it work? · How do I get SEIS/EIS advance assurance? · What is the risk-to-capital condition? · Which trades are excluded from SEIS and EIS? · Can my company lose SEIS/EIS status after the investment?
Primary sources: HMRC — Apply to use the Seed Enterprise Investment Scheme · HMRC — Apply for advance assurance on a venture capital scheme
