SEIS and EIS introduction

ELIGIBILITY AND INTERACTION

SEIS and EIS are schemes that allow investors buying shares in  eligible companies to claim some tax relief against their investments, to help offset the extra risk involved in funding early stage businesses.

To be eligible for SEIS, the company’s business must have been started less than two years before shares are issued - in other words it is from the start of trading (usually defined as the first sale) and not from when the company itself was incorporated. The company can receive up to £150,000 under SEIS, and must then use EIS for additional funding. Investors get 50% income tax relief on their SEIS investment amount compared to 30% under EIS. 

The tax relief is higher than EIS because a start up company is seen as riskier. An individual investor can get SEIS relief on up to £100,000 per annum, and can be a director of the company but not an employee. Under EIS investors can invest up to £1 million a year. They cannot be employees but may become a non-exec director after they have invested (a 'business angel'). Companies Amy take up to £5 million each year under EIS.

For SEIS info click here

For EIS info click here