SEIS and EIS are the two main UK venture-capital tax schemes for early-stage companies raising equity. They differ on company size, raise limits and the relief available to investors. Most companies use SEIS at the earliest stage and then move to EIS as they grow. This guide sets out every material difference in a single comparison table, then explains the decision logic and the sequencing question in plain terms.
SEIS vs EIS: the short answer
SEIS is designed for the very earliest stage: a company can raise up to £250,000 in total and investors receive 50% income tax relief. EIS handles larger raises, up to £5m per year and £12m over the company's lifetime, with investor relief at 30%. A company that starts under SEIS can later raise under EIS, and the two caps are entirely separate.
Company limits side by side
The company-side tests determine whether your company is eligible to issue shares under each scheme. Every figure below comes from HMRC guidance and must be met at the time of investment.
| Test | SEIS | EIS |
|---|---|---|
| Maximum total company raise | £250,000 in total | £5m per year; £12m lifetime (higher for KIC) |
| Gross assets ceiling | No more than £350,000 | Gross-asset test applies; see EIS guidance for the current limit |
| Employee ceiling | Fewer than 25 full-time-equivalent employees | Higher employee ceiling; see EIS guidance |
| Company age at investment | Within 3 years of starting to trade | Company-age test applies (a later window than the SEIS 3-year limit); see the EIS guidance for the current period |
The SEIS figures are fixed by the scheme rules and are sourced from HMRC's SEIS guidance. EIS has its own set of gross-asset and age tests; confirm the current figures against HMRC's EIS guidance at the point you apply.
Investor reliefs side by side
The relief your company's compliance protects is what makes each scheme attractive to investors. The rates and caps below determine the maximum relief an investor can claim in a given tax year. These are general guidance figures, not personal tax advice for any individual investor.
| Relief | SEIS | EIS |
|---|---|---|
| Income tax relief rate | 50% | 30% |
| Annual investor cap (income tax relief) | Up to £200,000 invested per tax year | Up to £1m per year (£2m where the excess above £1m is in knowledge-intensive companies) |
| Minimum share-holding period | 3 years | 3 years |
| CGT on disposal after hold period | CGT-free after 3 years; 50% CGT reinvestment exemption on reinvested gains | CGT deferral relief available; see EIS investor guidance |
The SEIS investor figures are sourced from HMRC's SEIS background guidance. The EIS investor figures are sourced from HMRC's venture-capital schemes investor relief guidance.
Which scheme fits which stage
The decision comes down to the same three company tests set out in the limits table above, applied at the point of the raise: the total raise, gross assets at investment, and how long the company has been trading. If your company is under £250,000 raised in total, under £350,000 in gross assets, and within three years of starting to trade, SEIS is the available route. Fail any one of those and EIS is the route to consider instead.
Where the company passes all three SEIS tests and the raise is small enough, SEIS is almost always the better starting route because investor relief is higher (50% versus 30%), which makes the round easier to fill.
Either way, confirm eligibility via advance assurance before marketing any round. It is not legally required, but it gives investors confidence, and the how-to-apply guide covers the mechanics. Our advance assurance service covers both routes.
Using SEIS and then EIS in the same journey
Many companies raise under SEIS at pre-seed, exhaust that allowance, and then return to investors under EIS at seed. The two caps are entirely separate: completing a SEIS raise does not reduce the EIS headroom available in a later round.
A worked example shows how this plays out in practice.
Pre-seed round. A company raises £150,000 from angels under SEIS. The company has gross assets below £350,000 and is within three years of starting to trade, so it meets the SEIS company tests. Investors can each claim 50% income tax relief on the amount they invested, up to their £200,000 annual cap. The company has now raised £150,000 of its £250,000 SEIS allowance.
Remaining SEIS headroom. The company has £100,000 of SEIS allowance remaining. It could raise a further £100,000 under SEIS (from the same or different investors, subject to each investor's annual cap) before the scheme is fully used.
Seed round under EIS. Eighteen months later, the company has grown beyond the SEIS gross-asset ceiling. It raises £1.2m from institutional angels and a venture fund under EIS. This is entirely within the £5m annual EIS cap. Investors in this round can claim 30% income tax relief on amounts up to their £1m annual cap. The £150,000 raised under SEIS in the earlier round plays no part in the EIS cap calculation.
The two rounds are tracked separately in the company's compliance statements and in HMRC's records. Use our SEIS and EIS relief calculator to model the investor tax position across both rounds. See also the guide to SEIS1 and EIS1 compliance statements for what the company files after each round closes.
Knowledge-intensive companies and the higher EIS limits
A knowledge-intensive company (KIC) can access higher limits under EIS on both the company and the investor side. On the company side, the EIS lifetime cap is higher than the standard £12m figure for KICs, though HMRC's EIS guidance sets out the specific ceiling rather than a single headline number used across all contexts. On the investor side, the annual allowance rises to £2m where the excess above £1m is invested in knowledge-intensive companies.
KIC status is determined by conditions relating to R&D expenditure intensity and the proportion of skilled employees. The qualifying tests are set out in the EIS guidance and in the underlying legislation. If your company is R&D-heavy and you believe it may qualify, this is worth confirming as part of the advance assurance application, since KIC status affects both the headroom available to the company and the relief available to each investor.
For funded startups running parallel R&D claims alongside an EIS raise, see the funded startups hub and the separate R&D guides on this site.
What both routes have in common: advance assurance and compliance statements
Regardless of which scheme applies, the compliance journey has the same two structural steps: advance assurance before the round, and the compliance statement (SEIS1 or EIS1) after the shares are issued and certain conditions are met.
Advance assurance is HMRC's pre-round clearance. It is not legally required but it is the practical standard for any raise marketed to sophisticated investors or venture funds, because investors will ask for it. A company applies before marketing the round, and HMRC confirms (or declines to confirm) that the proposed issue would qualify. It does not guarantee relief; HMRC can still withdraw it if the company's facts change before the shares are issued. The advance assurance guide covers the application in full.
The compliance statement (SEIS1 for SEIS rounds, EIS1 for EIS rounds) is filed after the round closes and certain post-issue conditions are met. Investors cannot claim their income tax relief until they hold the compliance certificate (SEIS3 or EIS3) that HMRC issues once the company has submitted a valid compliance statement. Missing or delaying the compliance statement directly blocks your investors from claiming relief.
See the detailed guide to the SEIS company checklist for a step-by-step walkthrough of what the company must do at each stage, and the guide to SEIS1 and EIS1 compliance statements for the filing mechanics. If you are at the pre-round stage, our advance assurance service covers the application for both SEIS and EIS.