SEIS Rules and Limits (2026): What Actually Qualifies
Every SEIS rule and limit in one place: the company tests, the investor limits, the money rules and when each is measured.
In this article
SEIS has a reputation for complexity it does not quite deserve. The SEIS rules are specific, but there are not many of them, and they sort neatly into three piles: rules about the company, rules about the investor, and rules about the money. This page holds all of them, with the current limits, so you can check any SEIS question against one list.
Everything here reflects the limits in force since 6 April 2023, checked against gov.uk. If you want the friendly tour first, start with what SEIS is; this is the reference version.
The company rules
Age. The qualifying trade must be less than three years old when the shares are issued, and the clock runs from the first commercial sale rather than from incorporation. A company can be older than three years and still qualify if its trade is younger; equally, a young company operating an old, acquired trade can fail the test.
Size. Two measures, both taken around the moment of issue: gross assets must be under £350,000 immediately before the shares are issued, and the company must have fewer than 25 full-time equivalent employees. Founders count. Part-timers count as fractions.
Independence. The company must be unquoted, must not be under the control of another company, and must have no arrangements in place to become either. Subsidiaries can exist, but they must be qualifying ones.
A real trade. The company must carry on a genuine commercial trade, run for profit, with a UK permanent establishment. Preparing to trade counts in limited ways, but the four-month trading condition described below means real activity must arrive quickly.
Risk to capital. The umbrella test over everything: the company must intend to grow and develop, and the money must be genuinely at risk. It exists to filter out arrangements engineered to harvest relief safely, and ordinary startups pass it by being ordinary startups.
The excluded activities
Some trades cannot use SEIS however small and young they are. The list targets asset-backed and financial businesses: dealing in land, commodities or shares; banking, insurance, money-lending and other financial activities; leasing; receiving royalties or licence fees in most cases; legal and accountancy services; property development; farming and market gardening; forestry; running hotels or care homes; and most energy generation. A company whose trade merely serves these sectors, software for hotels, say, is usually fine; a company whose returns come from the assets themselves is not. Edge cases deserve professional eyes, and our analysis of where founders slip shows why.
The investor rules
The annual limit. An individual can invest up to £200,000 under SEIS in a tax year, with relief at 50%. A carry-back election can move some or all of an investment into the previous year, as covered in the reliefs guide.
No connection. Anyone holding more than 30% of the shares, votes or assets cannot claim relief, and holdings of spouses, parents and children are counted together. Employees cannot claim either; directors can, in defined circumstances, which is why angel investors so often take board seats rather than jobs.
Real shares, real cash. The subscription must be new ordinary shares, paid in cash, with no preferential rights that shelter the investor from loss, and no linked loans or arrangements returning value.
The holding period. Three years from issue. Sell earlier and income tax relief is clawed back; the other reliefs hang on the same anniversary.
The money rules
The lifetime cap. £250,000 under SEIS in total, across every raise the company ever does, and certain de minimis state aid already received counts against it. Grants first, glory later, as more than one founder has discovered.
Use of funds. The money must be employed in the qualifying business activity. Buying another business, repaying founder loans or anything property-flavoured invites trouble.
The spending gate. Before the company can file its compliance statement and unlock certificates, it must have traded for at least four months and spent at least 70% of the SEIS money raised. The full sequence lives in how SEIS works.
Order against EIS. Where a company uses both schemes, SEIS shares must be issued before EIS shares. Same-day paperwork with ambiguous timestamps is a classic self-inflicted wound.
When each rule is measured
| Rule | Measured |
|---|---|
| Trade age | At each share issue |
| Gross assets | Immediately before each issue |
| Employees | At each issue |
| £250,000 cap | Cumulative, lifetime |
| Investor connection | Through 3 years after issue |
| Qualifying trade, independence | At issue and for 3 years after |
| 4 months and 70% spend | Before the compliance statement |
The pattern to internalise: the size tests are snapshots at issue, the behaviour tests are films that run for three years. Companies fail SEIS at both speeds.
When the rules change
The current limits arrived on 6 April 2023, when the raise cap rose from £150,000, the asset ceiling from £200,000, the trade age from two years, and the investor limit from £100,000. Changes travel through Finance Bills with commencement dates, so the rules that govern any share issue are the ones in force on its date. We track movement, or its absence, in our Budget coverage and keep the vital signs on the statistics page.
Common questions
What are the SEIS rules for companies?
A qualifying trade under 3 years old, fewer than 25 full-time equivalent employees, gross assets under £350,000 immediately before the issue, no more than £250,000 raised under SEIS in total, independence from other companies, a genuine commercial trade not on the excluded list, and money genuinely at risk.
How much can a company raise under SEIS?
£250,000 across its lifetime, reduced by certain de minimis state aid already received.
How much can an investor put into SEIS each year?
£200,000 per tax year, with 50% income tax relief, plus a carry-back option to the previous year.
Which businesses are excluded from SEIS?
Mainly asset-backed and financial trades: property development, dealing in land or shares, banking and lending, leasing, legal and accountancy services, farming, hotels, care homes and most energy generation.
When did the current SEIS limits start?
6 April 2023, when the raise cap, asset ceiling, trade age and investor limit were all increased.
Sources
gov.uk, Apply to use SEIS · gov.uk, SEIS limit increases · HMRC Venture Capital Schemes Manual
