SEIS and EIS: A Founder's Guide to Tax-Efficient Investment

If you're raising early-stage investment in the UK, understanding SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) can give you a real advantage. These government-backed schemes offer generous tax reliefs to investors, making your proposition considerably more attractive.

What is SEIS?

SEIS is designed for very early-stage companies. It offers investors 50% income tax relief on investments up to £200,000 per tax year, plus exemption from Capital Gains Tax on any profits from SEIS shares. For a founder, this means your investors get significant tax benefits - which makes the risk-reward calculus much more favourable.

What is EIS?

EIS is the next step up. It offers 30% income tax relief on investments up to £1 million per tax year (or £2 million if at least £1 million is in knowledge-intensive companies). Like SEIS, there's CGT exemption on profits and loss relief if things don't work out.

Why does this matter for founders?

Simply put: SEIS and EIS make your deal more attractive to investors. The tax reliefs significantly reduce the downside risk for investors, which means more people are willing to back early-stage businesses. At Lomond, many of our investments are structured as SEIS or EIS qualifying - it's one of the tools we use to deploy capital effectively.

How to qualify

There are specific criteria your company needs to meet: you need to be a UK-based company, trading for less than a certain period, under a certain number of employees, and within asset limits. The rules are detailed, so we always recommend getting proper tax advice before structuring a round.

If you're a founder raising capital and want to understand how SEIS/EIS might work for your business, get in touch. We're happy to talk it through.

Find out what angel investors actually look for or apply for funding directly.