SEIS vs EIS — what's the difference?
By SuLe · Updated 10 July 2026
SEIS and EIS are sibling tax-relief schemes: SEIS funds a company's first £250,000 with 50% income tax relief for investors, while EIS funds later growth — up to £5m in any 12 months and £12m lifetime — at 30% relief. The mechanics match (new ordinary shares, a 3-year holding period); what differs is company size, company age and how much relief investors get.
Key facts
- Relief rate: 50% income tax relief under SEIS vs 30% under EIS.
- Company caps: £250,000 lifetime under SEIS vs £5m in any 12 months and £12m lifetime under EIS (£20m knowledge-intensive).
- Age tests: a qualifying trade less than 3 years old (SEIS) vs first investment within 7 years of first commercial sale (EIS; 10 for knowledge-intensive).
- Size tests: gross assets of £350,000 or less and fewer than 25 FTE employees (SEIS) vs £15m before the issue and fewer than 250 FTE (EIS).
- Both schemes: 3-year holding period, new full-risk ordinary shares, and the risk-to-capital condition.
How do the investor reliefs compare?
SEIS is the more generous scheme, because the companies are riskier. Investors get 50% income tax relief on up to £200,000 per tax year, against 30% under EIS on up to £1m — £2m where the excess is in knowledge-intensive companies.
Both then work identically on the way out: gains are CGT-free if the shares are held for 3 years and the income tax relief was given and not withdrawn; loss relief lets an investor set a loss (net of relief received) against income tax or capital gains.
SEIS adds one extra: reinvestment relief, which exempts 50% of a capital gain reinvested into SEIS shares from CGT.
Which scheme is my company sized for?
SEIS is built for the very start: a qualifying trade less than 3 years old, gross assets of £350,000 or less immediately before the issue, fewer than 25 full-time equivalent employees, and £250,000 of lifetime headroom, spent on the trade within 3 years.
EIS picks up from there: fewer than 250 FTE employees (500 for knowledge-intensive companies), gross assets of £15m or less before the issue and £16m after, and a first investment within 7 years of your first commercial sale (10 knowledge-intensive). The money must be employed within 2 years.
Both schemes exclude the same trades — dealing in land or shares, banking, property development, hotels, energy generation and others — and both apply the risk-to-capital condition.
Can we use both schemes?
Yes — the standard playbook: exhaust the £250,000 SEIS allowance early, when 50% relief attracts the first angels, then raise under EIS as the company grows — even inside one round.
Sequencing is the catch. SEIS shares must be issued before EIS shares — issuing both in a same-day batch is a known trap that puts the SEIS relief at risk, so the SEIS tranche completes first and the EIS tranche follows later.
And the £5m 12-month cap counts all venture schemes combined, so SEIS money raised in the same 12 months uses part of it.
What is identical under both schemes?
The share requirements: new ordinary shares, full-risk, paid up in full in cash at issue, no preferential rights to assets on a winding up, and no pre-arranged exits or capital protection arrangements.
The discipline afterwards is shared too: shares held for 3 years or the income tax relief is withdrawn, and status can be lost within that period — by ceasing the qualifying trade, being acquired or repaying share capital, among others. Both schemes are currently legislated for shares issued before 6 April 2035.
One asymmetry to flag: directors can claim under SEIS, but under EIS paid directors are generally excluded unless the business angel rules apply.
| SEIS | EIS | |
|---|---|---|
| Investor income tax relief | 50% | 30% |
| Investor annual cap | £200,000 | £1m (£2m if the excess is in knowledge-intensive companies) |
| Company raise cap | £250,000 lifetime | £5m in any 12 months; £12m lifetime (£20m knowledge-intensive) |
| Gross assets | £350,000 or less immediately before the issue | £15m or less before, £16m after |
| Employees | Fewer than 25 full-time equivalents | Fewer than 250 (500 knowledge-intensive) |
| Company age | Qualifying trade less than 3 years old | First investment within 7 years of first commercial sale (10 knowledge-intensive) |
| Spending deadline | Spent on the qualifying trade within 3 years | Employed within 2 years |
| Holding period | 3 years | 3 years |
Worked example
Leo founded a developer-tools startup in early 2025. That autumn — trade 9 months old, gross assets £180,000, nine staff — he raised the full £250,000 under SEIS; his angels shared £125,000 of income tax relief at 50%.
Fourteen months later the company has 22 staff, but its SEIS allowance is gone. Leo raises £600,000 under EIS: his new investors share £180,000 of relief at 30%, and the round sits comfortably inside the £5m 12-month cap.
Because the SEIS shares were issued long before the EIS shares, the sequencing rule never bites.
Where founders go wrong
Promising 50% relief on an EIS round
— the rates differ, and investors price them in: a £10,000 ticket costs £5,000 net under SEIS but £7,000 under EIS.Assuming EIS is available because SEIS was
— the tests differ; a company can outgrow SEIS yet still fail EIS's 7-year first-commercial-sale window.Issuing SEIS and EIS shares on the same day
— SEIS shares must be issued first; the same-day batch is a known trap.Treating the £5m annual cap as EIS-only
— it counts all venture schemes combined in any 12 months, including your SEIS money.
Related questions
Can I raise under SEIS and EIS in the same round?
Yes, and many startups do: a SEIS tranche up to the £250,000 lifetime cap, with EIS investment on top. The trap is sequencing — SEIS shares must be issued before EIS shares, and a same-day batch puts the 50% relief at risk, so issue SEIS first and EIS later. [More: Can I raise under SEIS and EIS at the same time?]
Is my startup still eligible for SEIS?
Check 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 in the company's lifetime, and a qualifying trade less than 3 years old. Miss any and you are looking at EIS. [More: Is my startup eligible for SEIS?]
Do SEIS and EIS investors hold different shares?
Not usually. Both schemes require new ordinary shares that are full-risk, paid up in full in cash at issue, with no preferential rights to assets on a winding up and no pre-arranged exit — so in practice both sets of investors typically take the same class of ordinary shares.
Do both schemes use the same advance assurance process?
Yes — advance assurance is HMRC's non-statutory pre-clearance for the venture capital schemes, so a raise spanning SEIS and EIS can be covered in one exercise. It is not mandatory, but most angels require it, and applications need details of your expected investors. [More: How do I get SEIS/EIS advance assurance?]
Choosing between SEIS and EIS is rarely the hard part — protecting both reliefs through a messy, real-world round is; the mistakes only surface when investors try to claim. A SuLe solicitor can map your raise across the two schemes before anything is signed. Book a free SEIS/EIS readiness call and keep the 50% and the 30% intact.
Keep reading: What is SEIS and how does it work? · What is EIS and how does it work? · Can I raise under SEIS and EIS at the same time? · Is my startup eligible for SEIS? · Can founders or directors claim SEIS relief on their own shares?
Primary sources: HMRC — Apply to use the Seed Enterprise Investment Scheme · HMRC — Apply to use the Enterprise Investment Scheme
