A Founder's Guide to SEIS & EIS: 
Tax Reliefs That Unlock Investment

Raising early-stage funding is never easy. But in the UK, founders have a powerful tool at their disposal: the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS).

​

Both are designed to encourage private investors to back startups by offering them generous tax reliefs. For founders, that means an easier pitch: investors get a significant reduction in their risk, while you get the capital you need to grow.​

​

In this blog, we’ll walk through:

• What SEIS & EIS are (and the difference)

• Why they matter to founders & investors

• The step-by-step process from start to finish

• Common pitfalls to avoid

​

What are SEIS & EIS? 

SEIS is designed for very early-stage companies (trading less than 2 years, assets under £350k, max £250k raise).

EIS is the next stage up, for slightly more established companies (assets under £15m, up to £12m raise).

​

Investor Benefits 

SEIS: 50% income tax relief, CGT reinvestment relief, exemption on gains if shares are held 3+ years.

EIS: 30% income tax relief, CGT deferral relief, exemption on gains after 3+ years, inheritance tax relief.

In plain English → these schemes make it much easier for you to persuade investors to back you.​

​

Why They Matter to Founders! 

The first question most angel investors ask isn’t always about your product/service, it’s sometimes “are you SEIS/EIS eligible?”

​

Having that in place signals that you’re serious, you understand the landscape, and you’ve removed a key blocker to them writing a cheque.

​

The SEIS/EIS Process Step by Step

1. Check your eligibility

• Company age, size, sector restrictions (no property investment, finance, or energy generation).

• You must be carrying out a new qualifying trade.

​

2. Apply for Advance Assurance (optional, but strongly advised!)

• You (or your accountant) send HMRC details of your company, business plan, financial forecasts, and draft articles.

• HMRC confirm (in writing) whether they’d expect to grant SEIS/EIS relief if you issue shares.

• This letter is gold dust for pitching to investors.

​

3. Issue the shares to investors

• Shares must be ordinary, full-risk shares (no preference rights).

• Make sure the paperwork is watertight, mistakes here can invalidate the whole relief.

​

4. Submit the compliance statement (SEIS1/EIS1)

• Once the company has been trading for 4 months (or spent 70% of the funds), you file this with HMRC.

• HMRC then issues compliance certificates (SEIS3/EIS3) for each investor.

​

5. Investors claim their relief

• They use the SEIS3/EIS3 certificate to claim tax relief via self-assessment.

​

Common Pitfalls to Avoid

❌ Non-qualifying trades: Make sure your business model isn’t excluded.

❌ Wrong share structure: Avoid preference shares or convertible notes.

❌ Poor documentation: Missing or sloppy filings can mean HMRC refuses the relief.

❌ Timing issues: Trying to issue SEIS after the 2-year window has passed.

​

How We Support Founders Through SEIS/EIS

At lupto, we typically help with:

• Reviewing eligibility & structuring the round

• Drafting & submitting Advance Assurance

• Handling share issue paperwork & Companies House filings

• Coordinating with lawyers and investors to keep the process smooth

​

The result: you raise with confidence, investors claim relief without headaches, and you avoid costly mistakes.

​​

Final Thoughts

SEIS & EIS aren’t just tax schemes, they’re a strategic tool to unlock investment.

​Handled properly, they can make the difference between a tough raise and a successful one.

​Handled poorly, they can cause delays, investor frustration, or even invalidate the relief.

​If you’re a founder planning to raise, get your ducks in a row early. It will save you time, money, and stress.​​​​​​​​

​

Need support with SEIS/EIS compliance? Get in touch and we’ll guide you through the process.​​​​​​​​​​​​​​