SEIS, the Seed Enterprise Investment Scheme, is a UK government scheme that gives generous tax relief to people who invest in very young companies. Investors can claim 50% of what they invest back against their income tax, which makes your first funding round far more attractive to them. A qualifying company can raise up to £250,000 in total under SEIS.
It is one of the most useful tools an early UK founder has, and it is popular. According to HMRC's latest statistics, published in May 2026, 2,430 companies raised £276 million through SEIS in the 2024 to 2025 tax year, a 14% rise on the year before. Around 1,775 of them were using the scheme for the first time.
How does SEIS work for investors?
SEIS reduces the risk of backing an early-stage company. GOV.UK sets out the main reliefs for investors:
- Income tax relief of 50%. Someone who invests £10,000 in qualifying shares can reduce their income tax bill by up to £5,000.
- An annual limit of £200,000 of SEIS investment per person per tax year.
- No Capital Gains Tax on a profit when they sell the shares, provided they claimed income tax relief and kept the shares for at least three years.
- Capital gains reinvestment relief. If they reinvest a gain from selling something else, they can get relief on 50% of the amount reinvested.
- Loss relief. If the company fails, losses (minus the income tax relief already received) can be set against their income.
Investors need to hold the shares for at least three years to keep the full reliefs. They also cannot be "connected" to the company: together with their associates, they cannot hold more than 30% of its shares or voting rights. Employees generally cannot claim, although directors can.
Put simply, SEIS lets an angel investor take a chance on your company with a smaller share of their own money at risk. If your company qualifies, say so clearly in your pitch deck and first emails to investors.
Is my startup eligible for SEIS?
GOV.UK lists the conditions. At the time the shares are issued, your company must:
| Condition | Rule |
|---|---|
| Location | Established in the UK |
| Age of trade | Trading for less than 3 years (or not yet trading) |
| Gross assets | No more than £350,000 |
| Staff | Fewer than 25 full-time equivalent employees |
| Listing | Not on a recognised stock exchange, with no plans to be |
| Previous funding | No previous investment through EIS or a venture capital trust |
| Trade | A genuine commercial business aiming for profit, not mainly an excluded activity |
The company also must not be controlled by another company, and it must meet the "risk to capital" condition: you intend to grow the business over the long term, and investors face a real risk of losing money. Arrangements that protect some investors ahead of others can disqualify the investment.
The £250,000 limit includes other "de minimis" state aid your company has received in the previous three years, so add up any small grants before you plan your round. Some trades are excluded altogether, so read the GOV.UK list of excluded activities early if you are unsure about yours.
What can SEIS money be spent on?
The money must go towards your qualifying trade, preparing to start it, or research and development expected to lead to it. In practice, that covers the normal costs of building a young company: product development, hiring, marketing and running costs. GOV.UK says the money must be spent within three years of the shares being issued, and it generally cannot be used to buy shares in other companies.
How do you apply for SEIS advance assurance?
Advance assurance is optional, but it is worth getting because it gives investors comfort before they commit. You apply through HMRC's online form, and a director, the company secretary or an authorised agent can submit it. GOV.UK says you will need:
- The amount you plan to raise and how you plan to spend it.
- A business plan and financial forecasts.
- Your latest accounts, if you have any.
- Your articles of association and register of members.
- The latest draft of the document you will show investors.
- Details of any other agreements with shareholders.
- An explanation of how you meet the risk to capital condition.
If you have not used a venture capital scheme before, HMRC usually expects investor details too, such as the names and addresses of prospective investors. If you are using a fund or crowdfunding platform, you provide evidence that they have agreed to act for you.
Demand is high. HMRC's statistics show 4,085 applications for advance assurance in 2025 to 2026, with 3,090 approved at the time of publication and the rest still being processed. A clear, honest application that answers the risk to capital question directly gives you the best chance of a smooth decision.
What happens after you raise money under SEIS?
Once the shares are issued, you send HMRC a compliance statement called an SEIS1. You can only submit it after the company has traded for at least four months or spent at least 70% of the money raised. If HMRC approves it, you receive SEIS3 certificates to hand to each investor, and they use these to claim their relief.
After that, the company needs to keep following the scheme rules for at least three years, or investors can lose their relief. Simple habits help here: keep the SEIS paperwork in one folder, record how the money is spent and check with your accountant before any major change to your share structure.
Did the 2026 Budget change SEIS?
According to SeedLegals' summary of the Autumn Budget on 28 October 2026, the Budget did not change SEIS investment limits or relief rates. The government said it plans a small number of technical changes to make SEIS and EIS easier to use, and will consult on improving the advance assurance process. Rules can change, so always check the current figures on GOV.UK before you raise.
Frequently asked questions
What is the difference between SEIS and EIS?
SEIS is for the very earliest stage: companies trading for under three years, with up to £350,000 in gross assets, raising up to £250,000 in total. EIS, the Enterprise Investment Scheme, is the larger sister scheme for companies that have grown beyond that, with a lower rate of income tax relief. A company can use SEIS for its first round and move on to EIS for later ones.
How much can a company raise under SEIS?
Up to £250,000 in total over the company's life, according to GOV.UK. This includes other de minimis state aid received in the three years up to the investment, so small grants can reduce the amount available.
Can founders claim SEIS relief on their own investment?
Sometimes. Directors can claim, but investors and their associates cannot hold more than 30% of the company, which rules out most founders with large shareholdings. Employees who are not directors generally cannot claim. An accountant can confirm your position.
Is SEIS advance assurance compulsory?
No. It is optional, but it tells investors that HMRC considers the planned investment likely to qualify, which many find reassuring. It does not confirm that each individual investor meets the conditions.
How long do investors need to hold SEIS shares?
At least three years. Selling earlier, or the company stopping qualifying during that period, can mean the relief is withdrawn.
How does MeWeBe fit in?
Raising money is only one route to getting a startup off the ground. MeWeBe is a UK community building toward universal basic income, and founders can apply to join the network to get help building their product, either free or for a small equity share. In return, startups pledge a share of future profits to a community pool. Distributions from that pool are a roadmap goal rather than a promise, and would only begin once startups make sustained profits. Members join free and earn MWB coins, virtual points with no cash value, for taking part. You can see how MeWeBe works or ask other founders about their funding experiences in the forum.