Below we have outlined our 5 step process for any company seeking finance via EIS/SEIS.

Our Guide Grow your business with the Enterprise Investment Scheme is also available here. This gives a full summary of how EIS/SEIS can help your company. We hope you find it is useful.


Establish if your company qualifies for EIS/SEIS Relief

  • HMRC publish guidance for investors and companies, which provides further information For SEIS
  • Most trades qualify although there are certain exceptions – please see the excluded activities on HMRC’s website
  • However, whilst some excluded trades are clearly cut and dried such as property, some other activities do qualify although they would appear not to on first glance so it is worth consulting an experienced professional if you are in any doubt. A company can carry on some excluded activities, but these must not be ‘substantial’ part of the company’s trade. HMRC take ‘substantial’ to mean more than 20 per cent of the company’s trading activities
  • There are additional rules, summarised below and further details of which are set out at In addition, the company:
    • Must be an unquoted company i.e. not listed on the LSE or any other recognised stock exchange. AIM and Aquis Stock Exchange are not considered quoted
    • Must not be controlled by another company
    • May not control companies which are not qualifying subsidiaries – a qualifying subsidiary is one which is over 50% held and not under the control of another company. However, a subsidiary which applies the EIS monies must be at least 90% owned, as must a property managing subsidiary
    • Must not have gross assets of more than £15m before the EIS share issue or £16m immediately after a share issue
    • Must have fewer than 250 full-time employees (or their equivalents) at the time the shares are issued 500 for a ‘knowledge intensive company’
    • Must have a ‘permanent establishment’ in the UK (after 6th April 2011)
    • Must not raise more than £5 million of state aid risk finance including EIS in any twelve month period, or a total of £12 million (£20 million for a ‘knowledge intensive’ company)
    • In general must not have been trading for more than 7 years prior to raising its first SEIS or EIS finance (10 years for ‘knowledge intensive company)

The rules regarding not being controlled by another company, qualifying subsidiaries and the company carrying on the trade must be met throughout the three year EIS qualifying period. If they are not, then the investors will lose their reliefs.

The funds must be raised for growth and development of the business. The funds cannot be used to acquire a trade or business, certain intangible assets or shares in another company.


There are a numbers of qualifying conditions that the relevant company must meet in order for it to issue shares under the SEIS including the following further details of which are set out at

The value of the company’s gross assets (or if the issuing company is a parent, the group gross assets) must not exceed £200,000 immediately before the shares are issued.

  • The company must have less than 25 full time employees
  • The company must exist wholly for the purposes of carrying on a new qualifying trade. A qualifying trade will be “new” if the trade commenced less than 2 years before the shares were issued and the company did not carry on another trade at any time before the company began to carry on the qualifying trade
  • The maximum that can be raised under the SEIS is £150,000. This is a “lifetime” limit. Furthermore, the company must not have received any investment in the EIS or VCT schemes before SEIS shares are issued. However, the company can raise EIS or VCT funds after an SEIS round provided that at least 70% of the SEIS funds have been spent in the company’s qualifying business activity
  • The company must be unquoted when the shares are issued and there must be no arrangements for it to become quoted


Write a Business Plan

  • A well thought out and clearly written business plan is necessary to attract an investor, whichever route to finance is taken. HMRC will also want to see a business plan
  • This is a major activity and will use up valuable management time. However, it is worth doing well. If you need to employ a third party to do this, make sure that such party has the necessary experience and track record to produce a document that will hold the attention of a sceptical investor (who will have seen several such plans before yours)
  • Always ask for references or case studies before hiring your professionals


Obtain Advance Assurance from HMRC

  • You will need to obtain advance assurance from HMRC that your company, its trade and its shares qualify for EIS/SEIS purposes. This is done by application to the Enterprise Centre on Form EIS/SEIS AA available here. For more details on claiming Advance Assurance click here
  • The Enterprise Centre (Admin Team) can be contacted here:
  • The purpose of the Advance Assurance is mainly to give potential investors some comfort that the company should qualify for EIS/SEIS relief based on the information provided to obtain the advance assurance. However, this is not a guaranteed process since the company must comply with the rules during its qualifying period


Raise Capital

Generally companies seeking investment should consider various sources of capital, depending on the amount being sought. The suggestions below are not comprehensive but will act as guidance:

  • Less than £50,000: try friends, relations or your local accountants (who may know of somebody wishing to invest in a small company)
  • £50,000 to £250,000: contact local accountants, business angel networks and the British Business Angel Association
  • £250,000 to £750,000: contact one of the accountancy or legal members of the EISA
  • Over £750,000: contact one of the Sponsors or Promoters on the list of EISA members. Some sponsors may have a slightly higher minimum limit than this
  • £1m+ approach EISA Fund Manager members – make sure you do your homework and look up their criteria before approaching them
  • Remember always to be as prepared and articulate as possible when approaching potential investors. The first impression is critical and it is rare to have an opportunity to try again if your plan is rejected
  • The EIS Association does not engage directly in raising capital for companies although many of its members are actively involved in doing so. Other sources of useful information in respect of seeking capital investments are:

Looking for fund managers?

Use the dropdown below to find fund managers for your sector.


Further Funding Options

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Start trading

  • After 4 months trading (or immediately if the company has already been trading for 4 months), the company must submit a compliance statement on Form EIS1/SEIS1. To download EIS1 form click here. To download SEIS1 form click here. A separate EIS1/SEIS1 form must be submitted for each date on which shares are issued
  • Provided that all the conditions have been satisfied, HMRC will issue an EIS2/SEIS2 form to the company, confirming it is authorised to issue EIS/SEIS certificates and will supply sufficient EIS3/SEIS3 forms for each investor. These forms should be completed and sent to the investor, who must then submit the form to his/her own tax inspector. The relief may be given in the form of an adjustment to PAYE code, offset against self-assessment payments due or sometimes in the form of a rebate, depending on the timing and the individual’s circumstances. There is a time limit for claiming EIS/SEIS relief and investors will want to claim their tax relief as soon as possible so companies should be diligent at filing EIS1/SEIS1 forms promptly
  • Warning. EIS/SEIS Advance Assurance is granted on the basis of “information provided”. You should provide HMRC will all relevant information in order to ensure the integrity of the clearance and must remember that the company needs to comply throughout the three year qualifying period
  • For full details of Claiming EIS Tax Relief click here

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