EIS and SEIS offers for tax relief in 2024/25 or 2023/24
Archived article
Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.
When you back innovative early-stage companies under the Enterprise and Seed Enterprise Investment Schemes (EIS and SEIS) you’re offered generous tax reliefs. It’s how the government encourages investment from experienced investors in the dynamic, young and thus high-risk businesses that help drive the UK economy.
Up to 30% (EIS) or 50% (SEIS) income tax relief
Your EIS or SEIS investment should qualify for up to 30% (EIS) or 50% (SEIS) income tax relief (there are also other available EIS and SEIS tax benefits, such as capital gains tax deferral or relief).
This article explains when and how you might be able to apply income tax relief to the tax year your investment is completed – or claim back tax you already paid the previous year.
Tax benefits depend on circumstances and rules can change. This is a brief outline of complex rules and decisions should be based on the investment merit, not the tax reliefs alone.
Important: The information on this website is for experienced investors and is not advice nor a research or personal recommendation to invest. Please seek advice if unsure. There are limits to annual investment amounts and minimum holding periods to retain tax reliefs - the investments must also remain qualifying. EIS and SEIS investments are for the long-term, high risk and illiquid: you could lose the money you invest.
The investment date – usually the allotment date – is key
In general, when you invest in SEIS and EIS, the date your shares are allotted determines the investment date for tax purposes – not the date you applied to invest or made payment. The exception is Knowledge Intensive EIS funds (KI-approved EIS funds), where the investment date is the date the fund closes.
You can claim income tax relief for the tax year your EIS/SEIS investment date falls in. Alternatively, you could “carry back” and apply the relief to the previous year’s income tax bill – in effect, this lets you get back tax you have already paid or are due to pay.
In other words, if you invest in EIS/SEIS today, if the funds are deployed and shares allotted in the 2024/25 tax year, you could also potentially claim back income tax you paid in – or owe for – 2023/24.
EIS and SEIS offers usually provide a targeted allotment date, so investors can have an idea of the tax year for purposes of claiming tax relief – albeit this is not guaranteed.
Which current EIS and SEIS offer tax relief in 2024/25 or 2023/24?
There are several funds and single companies targeting deployment in 2024/25 (in some cases early on in the tax year) and potentially allowing carry back to the 2023/24 tax year.
The targeted deployment timescale, as well as the deadline, are clearly stated in our investment reviews, when available. If planning to invest, please check these carefully.
When can I claim the relief?
To be able to claim the tax relief, you will need to have received the EIS or SEIS certificate.
Certificates are normally issued some time after funds have been deployed. Deployment timescales can vary widely – from a few weeks to several months (as long as 24 months in some cases). You should check expected deployment timescales of an offer before you invest.
Once funds are deployed, shares will be allotted, enabling the company or fund manager to begin the process of issuing the relevant EIS3, EIS5 or SEIS3 certificate – you will need the information provided on these to claim the tax reliefs. You should receive one certificate for each of the companies in which you invest. So, for a fund investing in a portfolio of 10 companies, you should receive 10 certificates.
The exception is KI-approved EIS funds, where the manager issues a single EIS5 certificate, irrespective of how many companies the fund has invested in.
EIS3 or SEIS3 certificates could take around six months to be produced (longer in some cases), as HMRC must first confirm that the company has satisfied all requirements. EIS5 certificates can be issued once the fund has invested 90% of its capital, which could take up to two years – the manager normally also specifies a target timeframe.
You can submit a claim for income tax relief up to five years after the 31 January following the tax year in which the shares were issued.
You can read our simple step-by-step guides on:
You can also download free factsheets on EIS and SEIS, for a quick overview of how the tax reliefs work or compare:
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.