How to use the Seed Enterprise Investment Scheme (SEIS)


What is SEIS?

SEIS is a scheme created by the UK Government to encourage investment in startups.

The scheme helps founders and entrepreneurs access early-stage funding. It does this by encouraging investors to invest; allowing up to 50% of their investment to be claimed back in income tax relief (depending on their nominal tax rate) and can also offer capital gains tax reductions and other benefits.

EIS or SEIS? What’s the difference?

SEIS was designed for smaller businesses to raise money while in the startup phase when they are just beginning to trade; whereas EIS is intended for more established companies looking to raise money to help them to grow.


How do SEIS schemes work?

  • Early-stage UK companies in a qualifying trade who meet specific criteria can raise up to £150,000 via this scheme.
  • The company raises finance by issuing shares to private investors.
  • Each individual investor can make a maximum investment of £100,000 per tax year.
  • Tax and capital gains tax reliefs are available for individual investors who subscribe in cash for qualifying shares in qualifying companies.

It is advisable (although not mandatory) for a business seeking to secure investment through the Seed Enterprise Investment Scheme to obtain ‘advanced assurance’ from HMRC before approaching investors; this will give investors confidence before investing in your business that SEIS relief will be available to them. This assurance can be obtained via an online form on the HMRC website by clicking this link.

Once you’ve secured your funding, issued your shares and met the HMRC requirements for spending the money raised, you must complete a compliance statement (SEIS1) and return this to HMRC. HMRC will then provide you with the SEIS certificates to issue to your investors.
The investors must hold their shares for a minimum of three years. However, if you no longer qualify for SEIS during this time, then your investors’ ability to claim relief would be affected.

Related Article | Make your business more attractive to potential investors with EIS

How can I determine if my business is eligible?

Full details can be obtained via the HMRC website Use the Seed Enterprise Investment Scheme to raise money for your company.

  • The business carries out a new qualifying trade
  • Is established in the UK
  • Is not trading on a recognised stock exchange at the time of the share issue
  • Has no arrangements to become a quoted company or a subsidiary of one at the time of the share issue
  • Does not control another company unless that company is a qualifying subsidiary
  • Has not been controlled by another company since the date of your company’s incorporation

Your company, or any of its subsidiaries, must:

  • Not have gross assets over £200,000 when the shares are issued
  • Not be a member of a partnership
  • Have less than 25 full-time equivalent employees in total when the shares are issued

How do I find potential investors?

Usually, investors wishing to take advantage of SEIS investment opportunities are individual investors. These may be people already known to you or, more commonly, you can find them through groups located around the country. Some common sources of investors are:

  2. Business Angel groups
  3. Crowdfunding, for example, Seedrs, Syndicate Room, Crowdcube, etc.
  4. Friends and family

How can we help?

We can offer light-touch support to guide you through this process, or we can manage the fundraising process for you. Please get in touch if you think we can help

Related Article | What’s the right investment route for the tech startup?