SEIS vs EIS: A Guide for Companies and Investors

SEIS vs EIS: A Guide for Companies and Investors

The Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) are two UK government-backed schemes designed to encourage investment in early-stage and high-growth companies. Both offer generous tax reliefs to investors in exchange for backing ambitious, often higher-risk businesses. While they share the same purpose and much of the same framework, they are aimed at companies at different stages of maturity, and the tax incentives differ accordingly. This guide explains how each scheme works, the key differences, and which may suit different investors and companies.

What is the Seed Enterprise Investment Scheme (SEIS)?

SEIS is designed for the very earliest-stage companies, typically those trading for less than three years. Because these businesses carry the highest risk, SEIS offers the most generous tax reliefs of the two schemes. Investors can claim up to 50% income tax relief on their investment, capital gains tax reinvestment relief, capital gains tax exemption on qualifying exits, and loss relief if the company does not succeed. SEIS is aimed at seed-stage businesses raising smaller amounts of early-stage capital. 

What is the Enterprise Investment Scheme (EIS)?

EIS supports slightly more established companies that are still high-growth but have moved beyond the seed stage. It offers up to 30% income tax relief, capital gains tax exemption on qualifying exits, CGT deferral, and loss relief. EIS allows companies to raise larger sums and is often used for follow-on funding as the business scales.

SEIS vs EIS at a Glance

Feature	SEIS	EIS
Income tax relief	Up to 50%	Up to 30%
Company stage	Seed / earliest stage (trading under 3 years)	Early-stage but more established
Capital gains	CGT reinvestment relief + exemption on gains received from qualifying exits	CGT deferral relief + exemption on gains received from qualifying exits
Loss relief	Yes	Yes
Risk profile	High	High

Eligibility Differences

The schemes apply different qualifying conditions to companies, including trading age, gross assets, number of employees and the amount that can be raised. SEIS is restricted to the youngest, smallest companies, while EIS accommodates larger raises from businesses a little further along. Both schemes require the company to carry out a qualifying trade, and investors must hold their shares for a minimum period of three years to retain the reliefs. Companies typically seek advance assurance from HMRC to confirm eligibility before raising funds.

Which Scheme is Right for You?

For investors: SEIS offers the highest relief and suits those comfortable with the greatest risk at the earliest stage. EIS suits investors seeking a balance of strong tax incentives with slightly more established companies, and the ability to invest larger amounts. Many investors use both to build a diversified, tax-efficient early-stage portfolio.

For companies: SEIS is the natural starting point for seed-stage, UK businesses raising their first external capital; EIS becomes appropriate as the company grows and needs larger follow-on funding. Many companies use SEIS first and progress to EIS.

At Symvan Capital, we manage both SEIS and EIS funds focused on high-growth UK B2B technology companies, giving investors access to both schemes through a single, disciplined manager.

Tax treatment depends on individual circumstances and may change in the future. EIS and SEIS investments place capital at risk and are not suitable for all investors. This guide is for information only and does not constitute investment or tax advice.