SEIS or EIS: what founders should decide first

SEIS and EIS are tax schemes, not fundraising structures

The Seed Enterprise Investment Scheme, or SEIS, and Enterprise Investment Scheme, or EIS, are UK tax-advantaged venture capital schemes. A qualifying investor may be able to claim income-tax and other reliefs after subscribing for qualifying shares in a qualifying company. The relief is conditional. It depends on the company, trade, shares, investor, use of money, timing, and continued compliance.

Neither scheme is an entity type. A company does not “set up an EIS SPV” merely by forming a vehicle. Nor does advance assurance approve the investment, guarantee relief, authorize a financial promotion, or replace the company law work needed to issue shares.

Run the round as four connected workstreams:

An answer in one workstream does not settle the others.

SEIS or EIS

As of the HMRC guidance updated April 6, 2026, most companies can raise up to £250,000 in total under SEIS. The EIS and Venture Capital Trust combined lifetime limit is £24 million for most companies. Those numbers are ceilings, not targets, and special rules can apply.

The headline screening tests differ:

This is an initial screen, not a complete eligibility opinion. The qualifying-trade rules, independence and control tests, establishment requirement, risk-to-capital condition, investor connections, excluded activities, share rights, use-of-money period, and ongoing requirements can change the result.

Build the company eligibility file

Start before circulating a round deck. Record:

• Incorporation date and the date the qualifying trade began.
• Group structure, subsidiaries, acquisitions, and any controlled businesses.
• Employee count and gross assets immediately before the proposed issue.
• Every prior SEIS, EIS, VCT, social-investment, grant, or other relevant financing.
• A clear description of the trade and any excluded or mixed activities.
• A budget showing how much will be raised and how the company expects to use it.
• The proposed share rights, including redemption, liquidation, dividends, and investor protections.
• Founders, directors, employees, existing shareholders, and other connections to prospective investors.

Date the analysis. Eligibility can change between advance assurance and the actual issue, especially after a bridge, acquisition, hiring increase, asset change, or revised share term.

Design the commercial round first

Tax relief should support a viable financing, not dictate a confusing one. Agree the target, minimum close, valuation or price, security, investor rights, closing sequence, and expected use of proceeds. Then test that design against the scheme.

Avoid promising investors that relief “is guaranteed” or that a company “is EIS approved.” A more accurate statement is specific: the company received advance assurance on a stated date based on submitted facts; it intends to seek authority to issue compliance certificates after the qualifying conditions are met; each investor must obtain advice on their own position.

If the round contains several closings, keep a share-issue ledger by date. Scheme limits, investor eligibility, use of funds, and filing evidence attach to actual issuances, not a single fundraising slogan.

What advance assurance does and does not do

Advance assurance lets a company ask HMRC whether a proposed investment appears likely to qualify based on the information supplied. A useful application resembles a compact diligence file: business plan, financial forecasts, fundraising proposal, articles and draft agreements, share terms, group information, prior risk-finance investments, and intended use of money.

It does not reserve eligibility. HMRC can reach a different result if the eventual facts differ, a condition was omitted, the investment changes, or an ongoing requirement is later breached. Treat the response as dated evidence, then maintain a change log until the shares are issued.

Direct holding, nominee, or vehicle

How investors hold the shares can affect relief. A nominee may sometimes hold legal title while the investor remains the beneficial owner, but a pooled company, partnership, or other SPV creates a different chain of ownership. Do not assume that every participant in an aggregation vehicle can claim relief as if they subscribed directly.

Before marketing an aggregated round, map:

1. Who subscribes for the company shares.
2. Who is recorded in the company register.
3. Who owns the beneficial economic interest.
4. Who exercises voting and information rights.
5. Who receives the compliance certificate and makes the tax claim.
6. How fees, carry, and vehicle costs affect the subscription amount.

Have a tax adviser confirm the proposed chain. If individual relief is central to the round, resolve the holding model before investors sign or send money.

Financial promotions remain a separate question

A communication inviting or inducing someone to invest may be a financial promotion. The FCA states that promotions must be fair, clear, and not misleading, and UK restrictions can apply even when the underlying company appears eligible for SEIS or EIS.

Identify who creates, approves, sends, and retains each promotion. Record the intended recipient category, any exemption or approval relied on, required risk language, and the evidence supporting factual claims. Public social posts, founder messages, platform pages, webinars, and referral arrangements should be included in the map.

Close with an evidence ledger

At closing, reconcile:

• Board and shareholder authority to issue the shares.
• Final articles, investment agreement, subscriptions, and disclosure materials.
• Investor names, cash received, issue dates, share numbers, and certificates.
• The statutory register and Companies House filings where applicable.
• Scheme allocation by investor and the cumulative company limits.
• Any intermediary or nominee records connecting legal and beneficial ownership.
• The approved promotion and the version each investor received.

Keep a controlled copy of the bank statement and cash ledger. The amount subscribed, the amount issued, and the amount eventually claimed should tell the same story.

Compliance statements and investor certificates

The company normally submits the relevant compliance statement to HMRC after it has met the applicable conditions, then provides authorized certificates to investors. Do not issue a homemade certificate or tell investors to claim before the company has authority to do so.

Assign one owner to track the earliest submission date, compile supporting records, answer HMRC questions, distribute certificates securely, and preserve a certificate register. Investors may need the information for later tax returns, so plan for corrections and duplicate requests.

Monitor the years after the close

Relief can be reduced or withdrawn when relevant conditions cease to be met. Maintain a scheme-impact check for share buybacks, redemptions, capital reorganizations, acquisitions, disposals, trade changes, loans or value provided to investors, changes in control, and use of funds.

Put the check into board and transaction workflows rather than relying on memory. Before a material corporate action, ask the tax adviser whether it affects outstanding SEIS or EIS shares and whether investors must be notified.

Founder checklist

• Date-stamp the eligibility analysis and record assumptions.
• Design the financing on commercial terms, then test scheme compliance.
• Apply for advance assurance with complete and internally consistent evidence if it is useful to the raise.
• Avoid categorical promises about investor tax outcomes.
• Resolve direct, nominee, or vehicle ownership before marketing.
• Map and approve financial promotions separately from tax eligibility.
• Reconcile every closing to the statutory register and scheme limits.
• Assign the compliance-statement and certificate process to a named owner.
• Add SEIS and EIS impact review to material board decisions.
• Keep investors informed if a fact changes that may affect relief.

The scheme can make qualifying risk capital more attractive. The operating goal is narrower: make every claim traceable to the actual company, investor, share issue, and evidence file. If investors will be aggregated, apply the cap table vehicle guide before selecting the holding model.

How to use this guide

Treat this as an operating map, not a structure recommendation. The correct answer depends on the asset, investors, jurisdictions, offering method, tax position, and people performing regulated or fiduciary roles. Rules and provider services change. Confirm the live facts with qualified counsel, tax advisers, and the parties named in your actual documents.

Published by Run a Fund, an independent Superscout Inc. publication. Research and drafting may use AI-assisted tools; sources and material claims are reviewed before release. We do not accept payment for a favorable conclusion. Last substantive review: September 5, 2026.