EIS and SEIS in a UK Crowdfunding Raise: Limits, Advance Assurance and Marketing Rules

SEIS and EIS are HMRC venture capital schemes that give UK individual investors income tax and capital gains relief on newly issued full-risk ordinary shares, and most UK equity crowdfunding rounds are marketed on the back of them. A company can take up to £250,000 in total under SEIS, while most companies can raise up to £10 million in any 12-month period and £24 million across the company's lifetime under EIS and VCT investment combined — but eligibility turns on company age, gross assets, headcount and a risk-to-capital condition that HMRC assesses partly by looking at how the opportunity is being marketed.

That last point is the one issuers underestimate: the campaign is evidence, not a workstream downstream of the tax file. Below are the current limits, how advance assurance works for a platform raise, the compliance chain that produces investor certificates, and where the FCA promotion regime constrains what a campaign may claim. Informational only — Growth Turbine is a marketing firm, not a tax adviser and not an FCA-authorised person.

SEIS and EIS Side by Side

Figures above are from HMRC's guidance on how companies qualify for SEIS, applying to use EIS, and tax relief for investors.

The sequencing rule in the final row is the most expensive mistake available here: a seed round structured for EIS because it was marginally simpler at the time permanently closes the 50% relief door.

The EIS Company-Level Limits in Detail

The £10 million rolling window and £24 million lifetime ceiling aggregate EIS, VCTs, SEIS and state aid approved under the risk finance guidelines, and the lifetime figure includes money received by subsidiaries, former subsidiaries and acquired businesses — a common surprise in groups assembled by acquisition. Two carve-outs change the headline numbers:

• Specified companies. A Northern Ireland–registered company trading in goods or in the wholesale electricity market faces lower ceilings: £5 million per 12 months, £12 million lifetime, and gross assets of £15 million before the issue and £16 million after.
• Knowledge-intensive companies. A company carrying out significant research, development or innovation can apply as knowledge-intensive and raise up to £20 million per 12 months and £40 million lifetime (£10m and £20m where it is also a specified company). The age window extends to 10 years from first commercial sale or from turnover exceeding £200,000, and the headcount ceiling rises to fewer than 500 full-time equivalents. HMRC's knowledge-intensive guidance adds operating-cost tests of 10% a year across three years, or 15% in one of three.

What SEIS Requires

SEIS is tighter by design. The £250,000 ceiling is a total, not an annual allowance, and counts other de minimis state aid received in the three years up to and including the date of investment. Beyond gross assets and headcount, the trade must be genuinely new: not carried on for more than three years by the company or by anyone who transferred it in, and neither the company nor a qualifying subsidiary may have carried on a different trade beforehand.

Under both schemes the shares must be full-risk ordinary shares, paid up in full in cash at issue, not redeemable, and carrying no special rights to the company's assets. Any arrangement to protect the investor from risk, or to sell the shares during or at the end of the period, breaks the scheme — relevant for issuers tempted to use a buyback promise as a conversion device.

Investor-Side Reliefs

Relief can be claimed in the tax year of the investment or carried back a year, cannot be carried forward, and is only available against income tax actually payable in the UK — which matters when a campaign also runs to a non-resident audience, where the headline percentage may be worth nothing. The company satisfying the scheme rules is also necessary but not sufficient: each investor must separately meet the investor conditions, and relief is withdrawn if the company stops following the rules within three years.

Advance Assurance When the Round Is Going on a Platform

Advance assurance is HMRC's pre-issue opinion that a proposed investment is likely to meet the scheme conditions, and it is what most UK issuers point to in pre-launch marketing. A separate application is needed for each investment, and HMRC's guidance on applying for advance assurance asks for:

1. The core pack. Amount to be raised, business plan and forecasts, latest accounts, trading activities with expected spend, up-to-date articles, a register of members dated from the application, and any shareholder agreements.
2. The investor-facing documents. The latest draft of whatever explains the proposal to investors — the deck and draft campaign page are part of the tax file.
3. The risk-to-capital explanation, and for EIS how the money will be used for growth and development.
4. Evidence of the platform relationship. Where a company new to the schemes is raising through a crowdfunding platform, HMRC asks for evidence the platform has accepted the proposal and will continue to work with it. Where the raise is direct, it asks for prospective investors' names and addresses.

From Compliance Statement to Investor Certificate

Advance assurance entitles nobody to relief. The claim chain runs through a compliance statement filed after issue:

1. The company files form SEIS1 or EIS1 listing every investor requesting a certificate. For EIS it can only be submitted once the qualifying trade has run for four months, and must be filed within two years of that date or of the end of the tax year of issue, whichever is later.
2. HMRC reviews it and, if satisfied, issues form SEIS2 or EIS2 carrying a Unique Investment Reference number for that share issue.
3. The company enters the investment details and that reference on the certificates, then issues form SEIS3 or EIS3 to each listed investor — or, for investors who came in through an EIS knowledge-intensive approved fund, the fund manager issues form EIS5. The company then follows the scheme rules for at least three years, and files a new statement for each later share issue.

What a Campaign Can and Cannot Say About Relief

Two regimes operate here: HMRC governs whether relief is available, the FCA how the opportunity may be promoted. Under section 21 FSMA, marketing that invites or induces investment is a financial promotion, communicable by an unauthorised company only if an FCA-authorised person has approved the content or an exemption applies — our guide to the s21 approval regime covers that mechanism. Within an approved promotion, COBS 4.2 requires communications to be fair, clear and not misleading. Applied to tax relief, that tends to mean:

• Advance assurance is not an endorsement. HMRC states it relates only to certain scheme conditions being met on the basis of information the company provided, and "should not be read as a more general endorsement or as an indication of potential investment performance." Presenting it as validation of the business or the valuation misrepresents what the letter is.
• Relief depends on the investor too. A headline rate stated without the investor conditions, the UK income tax requirement and the annual caps gives a reader a number they may not be able to use at all. The three-year compliance period and the withdrawal mechanism are material facts, not small print.
• Relief is not a return. HMRC counts upfront tax relief as part of net return when assessing risk to capital, and will not consider the maximum return an investor could get if the company succeeds, "because this cannot be guaranteed."

There is a feedback loop worth naming: the factors HMRC weighs in assessing risk to capital expressly include the "marketing of the investment opportunity." A campaign that de-risks the pitch — implying downside protection, investor priority or a planned early exit — supplies evidence against the condition the company needs to satisfy.

What This Changes in the Funnel

Three adjustments tend to matter more than creative quality. First, qualify on tax position, not interest alone: an audience with no UK income tax liability cannot use the headline rate, and segmenting on residency moves both cost per committed investor and the post-close complaint rate. Second, sequence platform acceptance ahead of the advance assurance announcement — the order HMRC's evidence requirement implies anyway, which inverts the plan issuers usually arrive with. Third, test demand before the scheme architecture is locked: SEIS closes once EIS shares are issued, so round sizing has a one-way door in it, and a structured market validation test beforehand is cheaper than finding the constraint afterwards.

Growth Turbine has provided marketing support across more than $490M in aggregate issuer-reported totals, with 210+ fundraising campaigns managed supported across Reg-CF, Reg-D 506(c), Reg-A+ and tokenized securities offerings, and across 23+ crowdfunding platforms. UK issuers also raising from US investors should read our guide for international founders raising from US investors alongside this one.

Frequently Asked Questions

Can a company use both SEIS and EIS?

Yes, but only in that order. A company can raise under SEIS first and later under EIS, and SEIS amounts count toward the EIS and VCT lifetime limit. Once shares have been issued under EIS, or a VCT has invested, the company can no longer issue shares under SEIS.

Does advance assurance mean my investors will get tax relief?

No. Advance assurance is HMRC's opinion, based on information the company supplied, that certain scheme conditions are likely to be met, and HMRC states it should not be read as a wider endorsement or an indication of investment performance. Relief still requires a compliance statement after the shares are issued, and each investor must separately meet the investor conditions.

How much can a UK company raise under EIS in one year?

Most companies can raise up to £10 million in any 12-month period from EIS, VCTs, SEIS and certain approved state aid combined, with a £24 million lifetime ceiling. Knowledge-intensive companies that qualify can raise up to £20 million per 12 months and £40 million lifetime. Lower limits apply to specified Northern Ireland companies.

Can I advertise the 30% or 50% tax relief in my crowdfunding campaign?

Tax relief can be described in marketing, but the communication is a financial promotion that an FCA-authorised person must approve or that must fall within an exemption, and it must be fair, clear and not misleading. In practice that means stating that relief depends on the investor's own circumstances and UK income tax position, that annual caps apply, and that it can be withdrawn.

Does how I market the round affect whether the company qualifies?

It can. HMRC lists the marketing of the investment opportunity among the factors it weighs when assessing the risk-to-capital condition. Campaign material implying downside protection, investor priority or a planned early exit works against it, and risk-reducing arrangements of that kind defeat it.

Is Growth Turbine a tax adviser or an FCA-authorised firm?

No. Growth Turbine is an investor-acquisition marketing firm. It is not a tax adviser, not a registered dealer or platform, and not an FCA-authorised person, so it cannot approve a financial promotion or advise on scheme eligibility. Those are matters for UK-qualified tax counsel and an FCA-authorised approver.

Planning a UK Raise Around SEIS or EIS

The scheme architecture decides the audience, the headline and the order in which a UK campaign can do anything, and one leg of it is irreversible. Our equity crowdfunding marketing practice builds investor acquisition around the structure an issuer has settled with counsel, and the UK crowdfunding marketing page sets out how that work sits inside the FCA regime.

To review your round structure and the campaign implications, get in touch.

Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute legal, financial, or investment advice. Always consult with qualified legal counsel and financial advisors before launching a capital raise.