Do tax advisors in London help with SEIS and EIS tax relief?

In my twenty-plus years advising clients across the capital, from tech founders in Shoreditch to high-net-worth individuals in Mayfair, one question comes up time and again: do tax advisors in London actually make a real difference when it comes to SEIS and EIS tax relief? The short answer is yes, and in ways that go far beyond simply filling in a form. These schemes are among the most powerful incentives in the UK tax system for encouraging investment in early-stage companies, yet the rules are intricate, the paperwork demanding, and the penalties for getting it wrong can wipe out years of carefully planned relief. London-based tax advisors who specialise in this area bring practical, hands-on experience that helps both investors and companies navigate the process smoothly, maximise legitimate relief, and stay firmly on the right side of HMRC guidance.

Let me walk you through how these schemes work in practice and why working with an experienced tax advisor in London often turns what could be a stressful, error-prone exercise into a straightforward, value-adding part of your financial planning.

What SEIS and EIS actually deliver for investors and companies

The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) are designed to make higher-risk investments in young, unquoted trading companies more attractive by offering generous tax breaks. For investors, the headline benefit is income tax relief at 50 per cent under SEIS or 30 per cent under EIS on qualifying subscriptions. As we head into the 2026/27 tax year, the annual limit for SEIS remains £200,000 per individual, while EIS allows up to £1 million – or £2 million where at least £1 million is invested in knowledge-intensive companies. These figures have remained stable for SEIS while EIS investor limits have offered that extra headroom for KIC investments for some years now.

On the company side, SEIS is aimed squarely at the very earliest stage: businesses with gross assets of no more than £350,000 before the share issue, fewer than 25 full-time equivalent employees, and a trade that is less than two years old. A company can raise a maximum of £250,000 under SEIS in total. Once that’s done, many move on to EIS, which has seen significant expansions from 6 April 2026: gross assets can now reach £30 million before the issue and £35 million afterwards, with companies able to raise £10 million annually (or £20 million for knowledge-intensive companies) and a new lifetime limit of £24 million (or £40 million for KICs). These changes reflect the government’s push to support scale-ups in sectors like tech, life sciences and advanced manufacturing – areas where London remains a major hub.

Why London tax advisors are particularly well placed to help

Clients often ask me whether they really need specialist input or if they can handle SEIS and EIS themselves through their general accountant. In my experience, the difference shows up quickly once we start digging into the detail. London is home to a concentration of venture studios, angel networks, and growth companies that rely heavily on these schemes. Advisors here see the same patterns week in, week out: a founder who has already spent months building their business plan suddenly realises the compliance statement needs to be submitted in the right format, or an investor who has committed funds discovers their subscription doesn’t qualify because of a subtle connection rule they hadn’t spotted.

A good London tax advisor will first carry out a thorough eligibility review. For investors this means confirming you are not connected to the company (no more than 30 per cent shareholding, no employment or directorship unless you qualify as a business angel), that the shares are issued for cash and fully paid, and that the company is carrying on a qualifying trade. For companies we prepare the advance assurance application to HMRC – a step that is not mandatory but which gives both sides confidence before money changes hands. In the last few years I’ve helped dozens of London-based clients secure advance assurance within weeks rather than months, simply because we know exactly what HMRC wants to see in the business plan, the use-of-funds forecast and the directors’ declarations.

Real-world investor scenarios I see regularly

Take the case of a self-employed consultant in Islington who sold a previous business and realised a £180,000 capital gain. By reinvesting part of that gain into an SEIS-qualifying startup in the fintech space, he was able to claim reinvestment relief that sheltered £90,000 of the gain from CGT while also getting 50 per cent income tax relief on his £200,000 subscription – effectively reducing his tax bill by £100,000 in one go. Without specialist advice he might have missed the carry-back option that allowed him to treat part of the investment as made in the previous tax year, spreading the relief across two years when his marginal rate was particularly high.

Or consider the private-equity professional in the City who invests £800,000 across three EIS companies in a single tax year, including £1.1 million in a knowledge-intensive AI firm. The 30 per cent relief saves him £240,000 in income tax, and because the investment qualifies for deferral relief, any gains from other disposals within the permitted window can be deferred indefinitely until the EIS shares are sold. London advisors routinely run these combined relief calculations, factoring in the interaction with the annual allowance, personal savings allowance and even pension contributions to make sure nothing is wasted.

How the claiming process works in practice

Once shares are issued, the company applies for EIS or SEIS compliance via HMRC and issues the investor with an EIS3 or SEIS3 certificate. That certificate is your golden ticket. You claim the income tax relief on your Self Assessment return, entering the details in the additional information pages – specifically box 10 on page Ai2 for the total subscription and then providing the unique investment reference, company name, amount, and issue date in the supporting boxes. Many of my clients prefer us to handle the entire Self Assessment submission because a single transposition error in the reference number can delay processing for months.

If you receive the certificate after you’ve already filed, you can make a late claim by sending the form directly to HMRC or amending your return. The deadline is generous – five years after 31 January following the end of the tax year in which the shares were issued – but in practice it’s best to get everything sorted before the 31 January filing deadline to avoid interest and penalties on any underpaid tax.

To illustrate the reliefs side by side, here’s a quick comparison of the current position (2025/26 tax year, with 2026/27 updates already known):

These figures are taken straight from current HMRC guidance and the 2025 Autumn Budget measures. What the table doesn’t show is the nuance – for instance, how loss relief can be claimed against income if the company fails, or the precise way value received by the investor can reduce relief pound for pound.

Moving from investor relief to the company perspective

Once investors have secured their relief, the focus often shifts to the company’s ongoing compliance obligations. This is where many London tax practices add the most value, because the rules don’t stop at the point of investment. The company must spend the funds on qualifying business activities within a set timeframe, maintain the right number of employees, and avoid certain prohibited activities such as property development or financial services. A single breach – even an innocent one – can trigger a withdrawal notice from HMRC that affects every investor who claimed relief.

In the second part of this guide I’ll take you through the detailed compliance journey, the common pitfalls I’ve seen trip up otherwise well-run London businesses, and how an experienced advisor can structure the entire process to protect everyone’s relief while supporting genuine growth. We’ll look at real client journeys from initial advance assurance right through to successful exits, and examine how the 2026 limit increases are already changing the way ambitious scale-ups in the capital are planning their next funding rounds.

Continuing directly from the investor and company basics we’ve just covered, let’s now look at the practical mechanics that turn a promising investment into locked-in tax relief – and how specialist tax advisors in London make that transition reliable rather than risky.

The compliance statement and advance assurance route

For any company seeking SEIS or EIS investment, the process begins with the compliance statement (form SEIS1 or EIS1). This is not something you want to get wrong. I’ve sat with founders who tried to complete it themselves only to discover six months later that HMRC had rejected it because the trade description was too vague or the use-of-funds schedule didn’t demonstrate genuine growth intent. A London tax advisor who has submitted hundreds of these applications knows exactly how to frame the business plan so it meets HMRC’s expectations without over-promising.

Advance assurance is the smart move. You submit the application before shares are issued, and HMRC will confirm in writing whether the company appears to qualify. It’s not a guarantee – the final compliance check still happens after the money is raised – but in practice it gives investors the confidence to commit funds and allows the company to close the round quickly. In my practice we routinely secure advance assurance within four to six weeks for straightforward cases, and we maintain regular contact with the HMRC teams handling these applications, which speeds things up considerably.

Capital gains aspects that really matter

Beyond the income tax relief, the CGT benefits are often what make these schemes transformative. Under EIS, deferral relief allows you to roll over any capital gain – with no upper limit – by reinvesting in qualifying shares within one year before or three years after the disposal. I had a client last year who sold a commercial property for a £1.2 million gain; by investing £1.2 million into an EIS portfolio he deferred the entire tax liability. When the EIS shares are eventually sold after the three-year qualifying period, any gain on those shares is completely free of CGT provided full income tax relief was given and not withdrawn.

SEIS offers a different but equally useful CGT break: reinvestment relief shelters up to 50 per cent of a gain (capped at £100,000) when you subscribe for SEIS shares and claim the income tax relief. Many of my London clients use SEIS as a top-up to their existing EIS holdings, layering the reliefs carefully so they stay within both annual limits while optimising overall tax saving.

Loss relief is another safety net too often overlooked. If the company fails and the shares become worthless, you can claim income tax relief on the capital loss against your general income for the year of disposal or the previous year. This can be particularly valuable for higher-rate or additional-rate taxpayers in London where income levels are often substantial.

Common pitfalls and how experienced advisors prevent them

Over the years I’ve seen the same mistakes crop up repeatedly. The most frequent is the “connected person” rule – an investor who is also a director or who has provided a loan on non-commercial terms can lose relief entirely. Another classic is failing to keep the shares for the full three years; even selling one day early triggers a clawback of all relief plus interest. Then there are the more technical traps: making sure the company doesn’t carry on a non-qualifying trade (such as dealing in land or providing legal services), or inadvertently breaching the gross assets test after the investment because of a subsequent funding round.

London tax advisors who specialise in SEIS and EIS spend a lot of time stress-testing these issues before the money goes in. We review shareholder agreements, loan documents, and service contracts to ensure nothing jeopardises the relief. We also advise on the timing of any follow-on funding – many companies move from SEIS to EIS, but you have to get the sequence and the paperwork exactly right or the earlier relief can be endangered.

Real client outcomes from London practice

One recent example involved a health-tech startup in King’s Cross that raised £240,000 under SEIS from a syndicate of angels I introduced to the scheme. The company had already obtained advance assurance, the certificates were issued promptly, and every investor claimed their 50 per cent relief on time. Eighteen months later the business secured a further £1.8 million EIS round, this time with the expanded limits that became available from April 2026. The original angels were able to participate again, deferring additional gains and layering further relief without any compliance issues.

Another client, a senior banker in Canary Wharf, had built up a portfolio of EIS investments over five years. When one of the companies was acquired, he realised a tax-free gain of £420,000 because we had ensured full relief was in place and the three-year holding period was satisfied. Without ongoing advice he might have triggered an accidental withdrawal by accepting a small payment from the company that looked like a return of value.

Deadlines, record-keeping and staying compliant year after year

HMRC expects proper records. Keep your SEIS3 or EIS3 certificates safe, maintain evidence of the subscription (bank statements, share certificates), and be ready to produce them if your return is selected for enquiry. For companies, the ongoing reporting requirements include notifying HMRC of any changes that might affect qualification – new directors, changes in trade, or alterations to the use of funds.

As we move through 2026/27 the increased EIS limits are opening up new opportunities for London-based growth companies that previously felt constrained. At the same time, the rules around knowledge-intensive companies have become even more important for anyone wanting to push beyond the standard £1 million investor limit. A specialist advisor will help you identify whether your company or investment qualifies for KIC treatment, which can make a substantial difference to the overall tax saving.

The reality is that SEIS and EIS relief is not a set-and-forget product. It requires active management, careful timing and a clear understanding of how the reliefs interact with your wider tax position – from self-assessment deadlines and payment on account calculations right through to eventual exit planning. That is precisely where tax advisors in London who have spent decades working with these schemes add the greatest value. They translate the HMRC manuals into practical, actionable steps that protect your relief and support the underlying business success.

If you are an investor considering a SEIS or EIS opportunity, or a founder preparing to raise funds, the right advice at the outset almost always pays for itself many times over. The schemes are generous precisely because they are tightly regulated – get the detail right and the tax saving is real and lasting; get it wrong and the cost can be significant. In my experience, clients who work with a London advisor who truly understands the nuances sleep far more easily once the investment is made and the relief is secured.

1. Do I really need a tax advisor in London to claim SEIS or EIS relief, or can I do it myself?

In my experience, many clients start by thinking they can handle the paperwork themselves, especially if they already have a general accountant. However, the rules around qualifying trades, connected persons, and the precise wording required for advance assurance are deceptively complex. A specialist London tax advisor who deals with these schemes daily can spot issues early — such as a subtle loan arrangement that could disqualify relief or a business plan description that HMRC might reject. While it is technically possible to claim without advice, the cost of getting it wrong (clawback of relief plus interest) often far exceeds professional fees. Most of my London clients find the peace of mind and speed of the process well worth the investment.

2. What is the difference in tax relief between SEIS and EIS for an individual investor in 2026/27?

SEIS offers a higher headline rate of 50% income tax relief on investments up to £200,000 per tax year, making it particularly attractive for early-stage seed funding. EIS provides 30% relief on up to £1 million (or £2 million where the investment includes knowledge-intensive companies). Additionally, SEIS gives 50% CGT reinvestment relief (capped at £100,000 of gain sheltered), while EIS allows full CGT deferral with no upper limit. Both schemes provide CGT exemption on gains after three years, provided all conditions are met. The choice usually depends on the stage of the company and the size of the investment you are considering.

3. How long do I have to hold SEIS or EIS shares to keep the tax relief?

You must hold the shares for at least three years from the date of issue. Selling even one day early triggers a withdrawal of all income tax relief claimed, plus interest on the tax that becomes due. HMRC is strict on this point. In practice, I advise clients to plan their liquidity needs carefully and avoid any arrangement that could be seen as a pre-planned exit within the three-year window. Many London investors build a portfolio across multiple companies to spread risk while respecting the holding period.

4. Can I carry back SEIS or EIS investments to the previous tax year?

Yes, under SEIS you can elect to treat up to the full amount of your investment as made in the previous tax year, which is useful if your marginal rate was higher then. For EIS the carry-back is more limited — you can only carry back the amount needed to utilise unused relief in the prior year. These elections must be made on your Self Assessment return. I’ve helped several clients in higher earnings years maximise their relief by strategically using carry-back, especially when bonuses or asset sales pushed them into the additional rate band.

5. What happens if the SEIS or EIS company fails — can I claim any relief on the loss?

If the shares become worthless, you can claim income tax relief on the capital loss against your general income in the year of disposal or the previous year. This is known as loss relief against income and can be very valuable for higher-rate or additional-rate taxpayers. The relief is calculated after deducting any income tax relief already given. In my practice I’ve seen this provide meaningful tax savings for clients when early-stage investments unfortunately don’t succeed, effectively softening the financial blow.

6. Is advance assurance from HMRC mandatory for SEIS and EIS?

No, advance assurance is not mandatory, but it is strongly recommended. It involves submitting detailed information to HMRC before shares are issued, and they will indicate whether the company is likely to qualify. Without it, investors may be reluctant to commit funds, and any later rejection can cause significant issues. Most of the London funding rounds I’ve advised on use advance assurance because it speeds up the process and gives both the company and investors greater certainty.

7. How do I actually claim the tax relief on my Self Assessment?

Once you receive the EIS3 or SEIS3 certificate from the company, you enter the details on your Self Assessment tax return — typically in the additional information pages. You’ll need the company name, unique investment reference, date of issue, and amount subscribed. If you file before receiving the certificate, you can claim late by amending your return or writing to HMRC. Many of my clients ask us to prepare and submit the entire return to avoid errors in the reference numbers or calculations that could delay repayment.

8. Are there any restrictions on who can invest under SEIS and EIS?

Yes. You cannot claim relief if you are “connected” to the company — broadly, this means owning more than 30% of the shares (together with associates), being an employee or director (with limited business angel exceptions), or having certain loan arrangements. The shares must be issued for cash and fully paid up. These rules are designed to ensure the schemes support genuine external investment. London tax advisors routinely review investor circumstances to confirm eligibility before commitments are made.

9. How have the 2026 EIS limits changed the game for London growth companies?

From 6 April 2026, the EIS gross assets limit increased to £30 million before the share issue (and £35 million after), the annual fundraising limit rose to £10 million (£20 million for knowledge-intensive companies), and the lifetime limit became £24 million (£40 million for KICs). These changes have made EIS far more useful for scale-ups in London’s tech and life sciences sectors. In practice, I’m already seeing companies that previously hit the old ceilings now planning larger rounds with greater confidence, while investors can deploy more capital in qualifying opportunities.

10. What records should I keep as an investor or company director to protect my SEIS or EIS relief?

Keep your share certificate, the SEIS3 or EIS3 form, bank statements showing the subscription payment, and any correspondence with HMRC (including advance assurance letters). Companies should maintain detailed records of how the funds were spent, employee numbers, and any changes in the business. If HMRC opens an enquiry — which does happen — having clear, organised records makes the process much smoother. I always recommend my clients store these digitally and physically in a dedicated file, reviewed annually, so nothing is left to chance.