There are several criteria that businesses will need to meet in order to qualify as an SEIS business, and some trades are also excluded. For example the business must:

  •  Be a UK registered company
  •  Have fewer than 25 employees.
  •  Assets less than £200,000
  •  The business cannot be more than two years old.
  •  Must be an unquoted company
  •  No previous other risk capital scheme investments.
  •  No previous EIS or VCT investments made.

SEIS qualifying businesses are naturally high risk because they are early stage businesses. However often risk and reward tends to go hand in hand.


  • There are many benefits to investing in SEIS qualifying businesses which enable investors to gain from generous tax breaks while also allowing them to become part of startup Britain.
  • Under the SEIS tax relief scheme investors can receive 50% income tax relief and up to 28% capital gain tax relief on the total of any investments made into SEIS qualifying businesses. The disposal or sale of shares after a period of three years are also free from capital gains tax and
    further to this, investors can also receive up to 45% loss relief should the business fail within the three year holding period.
  • Investors are able to invest up to £100,000 in total in any tax year; this can be accumulated from a number of SEIS qualyfing businesses but cannot total above £100,000 per tax year. The investor can also not own more than 30% of the shares in any of the companies.Other benefits include IHT Business Property relief after two years, the opportunity for large gains, the involvement in a new and exciting business venture as well as the ability to dictate any level of involvement in the business.The SEIS scheme provides a great opportunity for
    individuals to become part of ‘Start Up Britain’ and to
    invest in some of the UK’s brightest startup businesses.



  • On the other hand it is also important to understand the risks with investing in any SEIS business, including dilution, loss of capital, illiquidity and rarity of dividends.
  • Any investment which is made through the platform is subject to dilution. Therefore if the business is to raise capital at a later stage it may issue new shares of the company to new investors.
  • Statistically over 80% of startups fail, and therefore it is important to be fully aware of the risks of losing your investment/capital as well as the benefits that can be gained. An individual’s financial situation will of course change from one period to another and therefore it is of vital importance to constantly review the suitability of making these investments. Individuals should not invest more money in businesses than they can afford to lose without altering their lifestyle.
  • Any investment that you make through the platform will be highly illiquid, as there is no secondary market for the number of shares of the investee company.
    Even for a successful company, the floatation is unlikely to occur for a number of years from the time you make your investment.
  • Start-ups and small businesses will rarely pay dividends. This means you are unlikely to see any return on capital until you are able to sell your shares in the investee company- which could occur for a
    number of years after you make your investment.