SEIS, the Seed Enterprise Investment Scheme, gives UK taxpayers income tax relief of 50% on up to £200,000 a tax year invested in new shares of qualifying start-ups, according to HMRC’s guidance for investors. Gains can be free of capital gains tax (CGT) after three years, reinvesting a gain made elsewhere exempts half of it, and a loss can be set against income. The price is risk: these companies are at most three years into trading, and the reliefs hold only if you and the company keep to the rules for three years.
Figures are as at 9 October 2026 and apply to the 2026 to 2027 tax year unless stated.
What SEIS is, and which companies qualify
SEIS, in Part 5A of the Income Tax Act 2007, mirrors the larger Enterprise Investment Scheme (EIS) so that companies can move on to EIS after a first round (HMRC’s Venture Capital Schemes Manual). A company cannot use SEIS once it has taken EIS or venture capital trust (VCT) money.
Under HMRC’s SEIS guidance for companies, when the shares are issued the company must:
- carry on a new qualifying trade that has not been carried on for more than three years;
- have gross assets of no more than £350,000 and fewer than 25 full-time equivalent employees;
- be established in the UK, unquoted and not controlled by another company;
- raise no more than £250,000 under SEIS in total, counting other de minimis state aid from the previous three years.
These limits, and the £200,000 investor limit, have applied since 6 April 2023 (policy paper, 15 March 2023). The Autumn Budget 2025 changes, in force from 6 April 2026, raised EIS and VCT company limits and cut VCT relief to 20% (policy paper, 26 November 2025); HMRC’s investor guidance, updated on 6 April 2026, shows the SEIS figures unchanged.
HMRC statistics published on 21 May 2026 show 2,430 companies raised £276 million under SEIS in the 2024 to 2025 tax year, up 14% on the year before; 11,200 investors claimed relief, and 56% of them put in £10,000 or less.
The four reliefs
1. Income tax relief at 50%
You can take 50% of the amount you subscribe off your income tax bill, on up to £200,000 a tax year, so relief is capped at £100,000 a year. It cannot take your liability below nil, and any excess is lost (VCM31130). You can carry some or all of it back to the previous tax year, within that year’s limit. If you also claim VCT or EIS relief, HMRC sets off VCT relief first, then EIS, then SEIS.
2. No CGT when you sell after three years
A gain on SEIS shares is exempt from CGT if you sell on or after the third anniversary of the issue date and you received income tax relief that has not been withdrawn (VCM40020). Relief restricted only because it cut your tax bill to nil still counts; with no relief at all, there is no exemption (HMRC helpsheet HS393).
3. Reinvestment relief on other gains
Reinvest a gain on any asset in SEIS shares on which you get income tax relief and 50% of the gain reinvested is exempt from CGT, up to £100,000 of exempt gain for the year. The gain must arise in the tax year the shares are issued, or treated as issued under carry-back, and you need not sell first (HMRC). Reinvesting a £20,000 gain in full takes £10,000 out of charge; at the 24% CGT rate for higher and additional-rate taxpayers in 2026 to 2027 (GOV.UK), that saves £2,400.
4. Loss relief if the company fails
If the shares are sold at a loss or become worthless, the loss is your cost minus the relief you kept and anything you got back, and you can set it against income of the tax year of the loss or the year before (Income Tax Act 2007, section 132).
SEIS losses sit outside the general cap on income tax reliefs, which is £50,000 or 25% of adjusted total income if higher (section 24A). On £10,000 that fails, the allowable loss is £5,000; an additional-rate taxpayer saving 45% (2026 to 2027 rate) gets £2,250 back, a net loss of £2,750. Our guide to SEIS loss relief covers the claim, and our worked examples show the full arithmetic.
The key numbers for 2026 to 2027
| Rule | Figure |
|---|---|
| Income tax relief | 50% of the amount subscribed |
| Maximum investment qualifying for relief | £200,000 a tax year |
| Carry-back | To 2025 to 2026, within that year’s £200,000 limit |
| Minimum holding period | Three years from the share issue date |
| CGT on a gain when you sell | Exempt after three years if relief is kept |
| Reinvestment relief | 50% of a reinvested gain exempt, up to £100,000 of gain |
| Loss relief | Loss net of relief, against income of that year or the year before |
| Your stake | No more than 30% with associates; no employees unless directors |
| Company limits | £250,000 SEIS in total; gross assets up to £350,000; fewer than 25 employees |
| Claim deadline | 31 January 2033 for shares issued in 2026 to 2027 |
The three-year rules that protect your relief
Breaking the SEIS conditions, most of which run for three years from the share issue, can claw relief back. The main investor tests:
- No employment. Neither you nor an associate may be an employee from the share issue to the third anniversary; directors do not count as employees (VCM32020).
- No substantial interest. You and your associates must not hold more than 30% of the share capital, voting power or rights on a winding up, or control the company, at any time from incorporation to the third anniversary of the issue (VCM32030). Associates include a spouse or civil partner, parents, grandparents, children, grandchildren and business partners, but not brothers or sisters.
- No protection. The shares must be full-risk ordinary shares paid in cash, with no arrangement securing a return, a future sale or protection from normal commercial risk, and no linked loan (HS393).
- No value back. Receiving value from the company reduces relief unless it is insignificant or exempt, such as reimbursed expenses or interest at a normal commercial rate; tell HMRC within 60 days (VCM36040).
Selling within three years withdraws relief in whole or in part, though a transfer to a spouse or civil partner, or the investor’s death, does not (VCM36020). The company must spend the money within three years on its qualifying trade and follow the rules for at least three years, or its investors lose relief (HMRC), which is why our due diligence questions ask founders how they will stay compliant. Our sister title SEIS Investments lists the full rules and limits.
How investors get in
The tax treatment is the same on each of the common routes, because relief is given on shares you own.
- Direct. You subscribe when a company raises a round, often after it has obtained HMRC advance assurance: HMRC’s view that the shares are likely to qualify, not an endorsement or a view on performance (HMRC). HMRC received 4,085 SEIS advance assurance applications in 2025 to 2026 and had approved 3,090 (76%) by March 2026 (HMRC statistics).
- Syndicates and platforms. Angel groups and online platforms let several investors back one company. When an FCA-authorised firm makes a direct offer of unlisted shares to retail investors, it must allow a cooling-off period of at least 24 hours the first time it makes you such an offer, check you are certified as a high net worth, sophisticated or restricted investor, and assess whether the investment is appropriate for you (FCA Handbook, COBS 4.12A). A restricted investor confirms they put less than 10% of their net assets into such investments in the past 12 months and intend to stay below 10% in the next 12 (COBS 4 Annex 5).
- Funds. A manager pools money across several companies and holds the shares through a nominee. HMRC treats nominee-held shares as yours (VCM37040), so relief comes company by company, each with its own certificate and issue date. SEIS Investments compares funds and direct investment.
How to claim: the SEIS3 certificate
You cannot claim until the company sends you form SEIS3. It can apply only after trading for at least four months or spending at least 70% of the money raised; HMRC then issues a unique investment reference and the certificates (HMRC), so the form can arrive months after you invest. With it in hand, HMRC’s guidance and HS393 give three ways to claim:
- For the current tax year, ask HMRC to change your PAYE tax code or reduce your Self Assessment payments on account.
- On your Self Assessment return, enter the total under “Other tax reliefs” in the Additional information pages, with the unique investment reference, company, amount and issue date of each investment.
- To carry relief back, or if the certificate arrives after you have filed, complete the claim form on the SEIS3 and send it to HMRC.
The deadline is five years after 31 January following the tax year of the investment: for shares issued in 2026 to 2027, that is 31 January 2033. Keep every SEIS3: HMRC may ask for it. SEIS Investments has a step-by-step claim guide.
What the reliefs do not change
Tax relief lowers your net cost, not the odds. The FCA’s risk summary warns that start-up investors often lose 100% of their money, that the likeliest ways to get money back, a sale of the business or a stock market listing, are not common, and that later funding rounds dilute your stake. If you pay little income tax, you cannot use the full 50%. For how SEIS sits against EIS and VCTs after the April 2026 changes, see our side-by-side comparison. For a plain list of what can go wrong, see SEIS Investments’ guide to the risks of SEIS.
