Why Enterprise Investment Scheme (EIS) matters to a first-time founder
EIS is a UK scheme that can give individual investors tax relief for buying new shares in qualifying companies. A company may use EIS after SEIS, but prior SEIS funding is not required. The schemes have different limits and eligibility tests. The relief is theirs. The conditions are yours to meet.
Examples of Enterprise Investment Scheme (EIS)
You have used a small SEIS round and now want to raise a larger angel round. An investor asks whether the new shares can be EIS. You check the company’s trade, age, how the money will be used, and whether you are issuing new shares rather than selling your own. The answer decides whether that investor’s terms work. It does not decide whether the business is a good idea.
Common misunderstanding
People use SEIS and EIS as interchangeable stickers, or they promise relief in a pitch before anyone has checked. The schemes have different limits and different tests. A promise you cannot keep is worse than a smaller round. This page is not tax advice.
When to use it
Look at EIS before you start talking to UK angel investors, not after a term sheet. Many angels will only invest if the shares qualify, so check the company’s age, trade, size and planned use of the money, and consider applying to HMRC for advance assurance. Then protect eligibility after the round, because some changes in the following years can cost investors their relief. This is not tax advice; confirm the current rules with an adviser.