Both SEIS and EIS are tax advantaged schemes designed to encourage private investment into small UK companies across a variety of sectors.
SEIS provides investors with income tax relief of 50% against the size of their investment. For example, if the investor puts in £100,000 they would receive a £50,000 reduction in their income tax bill and would also not pay any capital gains tax when selling their shares.
EIS is very similar is SEIS but is for more established companies that have traded for up to seven years. As EIS companies are typically not startups they are seen as being less risky, so the tax relief is not as generous – investors receive 30% back on their investment, not 50%. However companies can raise up to £12m under EIS.
Recent figures showed SEIS investments totalled £175m across 2,260 businesses, approximately £77k per investment round. For EIS investments this averaged at £518k per round.
Furthermore, tech companies received 38% of all (S)EIS investments and the majority of those companies were based in London.