UK founders raising investment from external shareholders will often encounter the term SEIS — the Seed Enterprise Investment Scheme. It is one of the most founder-relevant government tax incentive schemes in the UK startup ecosystem, and understanding what it is and how it affects the fundraising process helps founders engage more effectively with early-stage investors who ask about it.
SEIS is a UK government scheme designed to encourage investment in early-stage companies by offering income tax relief and other tax advantages to eligible investors. Qualifying companies can raise investment under SEIS, which makes their shares more attractive to investors by reducing the effective cost of the investment through tax relief. To qualify, companies must meet specific criteria relating to their size, age, trading activities, and structure. The scheme is administered by HMRC, and both the company and the investment must meet eligibility conditions.
SEIS is designed for very early-stage businesses raising their first external investment that meet the qualifying criteria. The tax advantages it offers to investors can meaningfully improve the terms on which investment is raised, but navigating the qualifying conditions and obtaining HMRC advance assurance is a process most founders work through with an accountant or solicitor. Our guide to SEIS for UK startups covers the key eligibility requirements.