How to Claim the Seed Enterprise Investment Scheme (SEIS) Relief

The Seed Enterprise Investment Scheme (SEIS) is one of the most generous tax incentives available to UK investors. It offers substantial income tax relief on investments in qualifying early-stage companies, along with Capital Gains Tax benefits and loss relief. If you are an angel investor, a supporter of startups, or an entrepreneur trying to raise seed funding, SEIS is worth understanding in detail.

What Is SEIS?

SEIS is a government scheme designed to encourage investment in very early-stage UK companies. It provides significant tax reliefs to individuals who subscribe for new shares in qualifying companies. The scheme was made permanent and expanded in April 2023 — the annual investment limit was doubled to £200,000 per investor, and the company limits were also increased.

Income Tax Relief

Investors can claim income tax relief of 50% of the amount invested in SEIS-qualifying shares, up to a maximum investment of £200,000 per tax year. So a £200,000 SEIS investment reduces your income tax bill by £100,000. The relief cannot exceed your total income tax liability for the year — but excess relief can be carried back to the previous tax year (subject to that year's limits). You must hold the shares for at least 3 years to keep the relief; a premature disposal triggers repayment of the tax benefit.

CGT Exemption on Disposal

Gains on the disposal of SEIS shares (after the 3-year holding period) are completely exempt from CGT, provided you claimed and kept income tax relief on the investment. This is in addition to the income tax relief — a double tax advantage. If you sell the shares at a loss, the loss (net of income tax relief received) can be set against income rather than just gains, providing further tax relief.

CGT Reinvestment Relief

Until 5 April 2025, investing a gain in SEIS shares allowed you to exempt 50% of that reinvested gain from CGT. This relief was abolished for investments made on or after 6 April 2025 — check the current position with your tax adviser if considering this strategy.

Qualifying Companies

The company must be UK-incorporated and resident; carrying on, or preparing to carry on, a qualifying trade (most commercial trades qualify — excluding certain activities like property investment, financial services, and legal work); less than 3 years old at the date of the SEIS investment; have fewer than 25 full-time employees; have gross assets of no more than £350,000; not be listed on a recognised stock exchange; not be controlled by another company; have raised no more than £250,000 under SEIS in total.

How to Claim SEIS Relief

The company must apply to HMRC for SEIS advance assurance (confirmation that it qualifies) before issuing shares, and then apply for SEIS1 compliance certificates after the shares are issued. Once you receive your SEIS3 certificate (provided by the company), claim the income tax relief through your Self-Assessment return in the tax year of investment, or carry it back to the previous year.

SEIS vs EIS

The Enterprise Investment Scheme (EIS) is the larger counterpart to SEIS, offering 30% income tax relief on investments up to £1 million (£2 million for knowledge-intensive companies). EIS companies can be larger and more established than SEIS companies. Many companies use SEIS for their earliest seed rounds and then move to EIS for later rounds.