What is EIS?
The Enterprise Investment Scheme (EIS) gives investors 30% income tax relief on new shares in qualifying UK trading companies, plus Capital Gains Tax advantages.
What EIS means
The Enterprise Investment Scheme is the bigger sibling of SEIS. It helps established but still young companies raise larger amounts by giving investors tax reliefs:
- 30% income tax relief on up to £1 million invested a year, or £2 million if the amount over £1 million goes into knowledge-intensive companies
- no Capital Gains Tax on a gain when the shares are sold, if held for at least three years with income tax relief given
- deferral relief, which postpones Capital Gains Tax on another gain reinvested in EIS shares
- loss relief against income if the shares are sold at a loss
Companies must be unquoted, carry on a qualifying trade and usually raise their first EIS money within seven years of their first commercial sale, or ten years for knowledge-intensive companies. From 6 April 2026 most companies can raise up to £24 million over their lifetime and £10 million in any 12 months under the venture capital schemes, with gross assets of no more than £30 million before the share issue and £35 million after. Lower limits of £12 million and £5 million apply to specified companies in Northern Ireland.
Example
An investor has just made a £80,000 gain selling listed shares and invests £80,000 in EIS shares within the time limit.
| Relief | Value |
|---|---|
| Income tax relief at 30% | £24,000 |
| Capital Gains Tax deferred on the £80,000 gain at 24% | £19,200 |
| Gain on the EIS shares after three years | Exempt |
The deferred gain comes back into charge when the EIS shares are sold, unless it is deferred again into another EIS investment.
Why it matters for your business
EIS opens the door to larger rounds than SEIS allows and is familiar to most angel investors and funds. The company files an EIS1 compliance statement after the shares are issued, and HMRC then authorises EIS3 certificates for investors. Advance assurance is strongly recommended. Shares must carry real risk to capital, so arrangements that guarantee investors their money back will not qualify. Cloudkeepers can help prepare the application and keep the company inside the rules for the three-year period.
SEIS vs EIS
| SEIS | EIS | |
|---|---|---|
| Income tax relief | 50% | 30% |
| Investor annual limit | £200,000 | £1m (£2m for knowledge-intensive) |
| Typical company stage | Trading under three years | Usually within seven years of first sale |
Common questions
Yes. Many startups raise a seed round under SEIS and then a larger round under EIS. The SEIS shares must be issued before the EIS shares, even if only by a day, and the SEIS money counts towards the company's overall limits.
Once the company has filed its EIS1 compliance statement and HMRC has authorised it to issue EIS3 certificates. The investor uses the certificate to claim on their tax return, or by asking HMRC to adjust their tax code. Relief can often be carried back to the previous tax year.