Seed Enterprise Investment Scheme (SEIS)

Seed Enterprise Investment Scheme (SEIS) — Company Certification

Offers United Kingdom start-up founders investment support through certified tax relief for early innovation and development.

The Seed Enterprise Investment Scheme (SEIS) is the UK's most generous venture capital tax-relief scheme, designed for very early-stage companies raising their first external equity. Investors receive 50% Income Tax relief on the amount invested plus a 50% CGT reinvestment exemption, making SEIS more attractive to early investors than the 30% relief available under EIS. As with EIS, it is the company that applies to HMRC for certification, not the investor. Companies can raise a total of up to £250,000 through SEIS — a limit raised from £150,000 in April 2023 — and funds must be deployed on qualifying activity within three years of share issue. Each investor is limited to £200,000 per tax year under SEIS.

Company eligibility conditions are significantly more restrictive than EIS: the qualifying trade must be less than three years old at share issue, gross assets must be £350,000 or less at share issue (raised from £200,000 in April 2023), and the company must have fewer than 25 full-time equivalent employees. Critically, the company must never previously have received EIS or VCT investment — once EIS or VCT shares have been issued, SEIS becomes permanently unavailable regardless of the company's size at that point. The company must have a permanent UK establishment, must not be listed on a recognised stock exchange, and must not be controlled by another company since incorporation.

The certification process mirrors EIS: an optional Advance Assurance may be sought from HMRC before issuing shares. After either four months of qualifying trading activity or once 70% or more of the raised amount has been spent, the company submits a Compliance Statement (form SEIS1). HMRC then issues form SEIS3 to each qualifying investor. The company must observe scheme rules for at least three years post-investment; breaches trigger clawback of investor relief. The SEIS-to-EIS progression is common for growing companies: SEIS raises up to £250,000 at seed stage, then EIS raises up to £10 million annually at growth stage. Once the SEIS round is complete and shares have been issued, the company becomes eligible to raise under EIS in a subsequent round.