SEIS, EIS and venture capital trusts (VCTs) all give income tax relief for backing small UK companies, but at different rates and with different strings. For the 2026 to 2027 tax year, relief is 50% for SEIS, 30% for EIS and 20% for VCTs, according to HMRC’s guidance for investors, updated on 6 April 2026. In general, the higher the relief, the younger the companies and the harder the shares are to sell.
Figures are as at 9 October 2026. The reliefs reduce UK income tax, so they are only worth as much as the income tax you owe.
What changed on 6 April 2026
The Autumn Budget 2025 changed EIS and VCTs, not SEIS. The policy paper published on 26 November 2025 cut VCT income tax relief from 30% to 20% and doubled the annual and lifetime limits on how much a company can raise. Finance Act 2026 brought the changes in for investments on or after 6 April 2026 (VCM1010).
| EIS and VCT company limit | To 5 April 2026 | From 6 April 2026 |
|---|---|---|
| Annual investment limit | £5 million | £10 million |
| Annual limit, knowledge-intensive companies | £10 million | £20 million |
| Lifetime limit | £12 million | £24 million |
| Lifetime limit, knowledge-intensive companies | £20 million | £40 million |
| Gross assets before and after the issue | £15 million and £16 million | £30 million and £35 million |
| VCT income tax relief | 30% | 20% |
Companies in Northern Ireland that trade in goods or in electricity keep the old limits. The investor limits did not change. SEIS still runs on the figures set on 6 April 2023 (policy paper, 15 March 2023), and our sister title SEIS Investments tracks Budget changes for SEIS.
SEIS, EIS, VCT: the rules side by side
The table draws on HMRC’s investor guidance, its company guidance for SEIS and EIS, the November 2025 policy paper and the Income Tax Act 2007 (sections 157, 257AA and 261).
| 2026 to 2027 rules | SEIS | EIS | VCT |
|---|---|---|---|
| What you buy | New shares in one very young company | New shares in one small or growing unlisted company | New shares in a listed fund that backs small unlisted companies |
| Income tax relief | 50% | 30% | 20% (30% before 6 April 2026) |
| Investor limit for relief, per tax year | £200,000 | £1 million, or £2 million if at least £1 million is in knowledge-intensive companies | £200,000 |
| Carry back to previous tax year | Yes | Yes | No |
| Minimum holding period | Three years | Three years | Five years |
| Dividends | Taxable | Taxable | Tax-free on shares acquired within the £200,000 limit |
| CGT on a gain when you sell | Exempt if income tax relief was received and kept | Exempt if income tax relief was received and kept | Exempt, for new and second-hand shares within the £200,000 annual limit |
| Relief for gains made elsewhere | 50% of a reinvested gain exempt, up to £100,000 of gain | Gain deferred, up to the amount reinvested, until the EIS shares are sold | None |
| Loss relief against income | Yes | Yes | No |
| Company size at investment | Gross assets up to £350,000; fewer than 25 employees; trade no more than three years old | Gross assets up to £30 million before and £35 million after the issue; fewer than 250 employees; within seven years of first commercial sale | Investee companies: same annual, lifetime and gross asset limits as EIS |
| Most a company can raise | £250,000 under SEIS in total | £10 million a year and £24 million in total (£20 million and £40 million for knowledge-intensive companies) | Counts towards the same EIS and VCT limits |
| Liquidity | No market; exit usually needs a sale or listing | No market; exit usually needs a sale or listing | Listed on a regulated market; relief lost if sold within five years |
| Who can claim | Individuals; not employees (directors can claim); no more than 30% stake with associates | Individuals not connected with the company; paid directors restricted; no more than 30% stake | Individuals aged 18 or over |
| End date for new shares | None in the legislation | Shares issued before 6 April 2035 | Shares issued before 6 April 2035 |
How to read the table
Relief rises with risk
SEIS is for the earliest stage: a trade no more than three years old, gross assets of up to £350,000 and fewer than 25 employees (HMRC). EIS reaches companies with up to £30 million of gross assets before the issue, within seven years of their first commercial sale (HMRC). A VCT spreads money across a portfolio of such companies, must keep its own shares admitted to trading on a regulated market (section 274) and carries the lowest relief.
Capital gains work differently in each
All three exempt a gain on the scheme shares themselves if the conditions are met. They differ on gains made elsewhere. SEIS reinvestment relief makes half of a reinvested gain exempt, up to £100,000 of gain (HS393). EIS deferral relief postpones tax on a gain, up to the amount you reinvest, if you invest between one year before and three years after the disposal; the tax comes back when you sell the EIS shares, the company stops qualifying or you become non-resident (HMRC). VCTs offer neither, because there is no CGT relief on the way in.
Only SEIS and EIS soften a failure
If an SEIS or EIS company fails, the loss after income tax relief can be set against income of that tax year or the year before (ITA 2007, section 132). On £10,000 that fails, an additional-rate taxpayer is left £2,750 down under SEIS and £3,850 under EIS; our worked examples show the arithmetic and our loss relief guide the claim. VCTs have no loss relief against income.
Liquidity and income
VCT shares can be sold on the market, and dividends and disposals are tax-free on shares acquired within the £200,000 annual limit (VCM50010). Selling newly issued shares within five years claws back the income tax relief. SEIS and EIS shares have no market. The FCA’s risk summary says the most likely ways to get money back from a start-up are a sale of the business or a stock market listing, and that these events are not common.
Who can claim
SEIS and EIS relief is for individuals who are not connected with the company: no employees, and no stake above 30% with associates. SEIS lets directors claim; EIS restricts paid directors unless their payments are permitted, such as reasonable expenses or commercial rent (HMRC). VCT relief needs the investor to be at least 18 when the shares are issued (section 261). When an FCA-authorised firm makes a direct offer of unlisted shares to retail investors, FCA rules require a 24-hour cooling-off period, investor certification and an appropriateness check (COBS 4.12A).
Using the schemes together
Each scheme has its own annual limit, so an investor can use all three in one tax year, within the income tax they owe. HMRC sets off VCT relief first, then EIS, then SEIS (VCM31130). For companies the order is fixed the other way: SEIS is not available once a company has taken EIS or VCT money (HMRC), so SEIS rounds come first. SEIS Investments explains how SEIS and EIS fit together.
The schemes are different sizes. In the 2024 to 2025 tax year, 3,735 companies raised £1,575 million under EIS and 2,430 raised £276 million under SEIS (HMRC statistics, 21 May 2026), while 45 VCTs raised £881 million (HMRC VCT statistics). Both sets of figures predate the VCT relief cut.
For the investor’s guide to SEIS, start with our SEIS cornerstone; for where these schemes sit among ISAs, pensions and other wrappers, see tax-efficient investing in the UK. SEIS Investments has its own SEIS, EIS and VCT comparison.
