Blash Advisory is a London-headquartered corporate finance and advisory firm specialising in SEIS and EIS diligence, serving UK startup founders, angel investors, venture capital funds and family offices across the UK, EMEA, the Far East and India.
Every SEIS and EIS engagement runs through the same five-step framework, so the relief is protected for the company and for every investor in the round.
Scheme Eligibility Assessment
We test the company against the core SEIS and EIS conditions, including UK permanent establishment, unquoted status, gross-asset and employee limits, the age of the trade, and whether the activity is qualifying or excluded. This establishes which scheme, or combination, the company can use before any capital is raised.
Risk-to-Capital and Growth-Intent Review
Both schemes require that the investment carries a genuine risk to the investor's capital and that the money funds long-term growth and development. We document the growth plans, use of funds and commercial risk so the round satisfies HMRC's risk-to-capital condition.
Share Structure and Investment Terms Design
We confirm that the shares to be issued are full-risk ordinary shares carrying no preferential rights to assets on a winding up, that investor and company limits are respected, and that the timing and terms align with scheme rules. Getting the instrument right protects the relief for every investor.
Advance Assurance and Evidence Pack
We prepare and submit the advance assurance application to HMRC, with the business plan, financial forecasts, use-of-funds statement and supporting evidence a caseworker expects. Advance assurance gives investors comfort that the company is expected to qualify before they commit.
Compliance Statement and Investor Certificates
After the round closes and the trading and spend conditions are met, we prepare and file the SEIS1 or EIS1 compliance statement so HMRC can authorise the SEIS3 or EIS3 certificates investors use to claim relief. We also flag the three-year holding period and the events that can withdraw relief.
Is SEIS available for AI startups?
Yes, most AI and software startups qualify, because SEIS and EIS focus on whether the trade is a qualifying activity rather than the technology involved. An early-stage AI company developing its own products or services for long-term growth generally meets the trade test. The activity must not fall into the excluded list, which covers areas such as financial services, dealing in land, and legal or accountancy work, so an AI company whose trade is essentially lending or financial intermediation may be caught. The company must also satisfy the risk-to-capital condition, which most genuine early-stage AI ventures meet comfortably.
What disqualifies a company from EIS?
A company is disqualified if it fails any of the core conditions. Common reasons include gross assets above the limit, too many employees, the trade being outside the seven-year window from first commercial sale, or the company being quoted or under the control of another company. Carrying on an excluded activity as a substantial part of the trade is disqualifying, as is failing the risk-to-capital condition. Issuing shares with preferential rights, or using the money for something other than a qualifying trade, will also break the relief. Most disqualifications are avoidable if the structure is checked before the round.
How long does advance assurance take?
Advance assurance is HMRC's non-binding indication that a company is expected to qualify. There is no statutory deadline, and the time taken depends on HMRC's workload and how complete the application is. A well-prepared application, with a clear business plan, financial forecasts, a use-of-funds statement and details of the shares and investors, is processed more quickly than one that prompts follow-up questions. Founders should allow several weeks and build advance assurance into the fundraising timeline rather than requesting it once a round is already closing. Advance assurance is optional, but most investors expect to see it.
What is the difference between SEIS and EIS?
SEIS is aimed at the earliest-stage companies and offers investors more generous relief to reflect the higher risk, while EIS supports slightly larger, more established companies raising more capital. SEIS applies to very young companies below tighter gross-asset and employee limits, with a lower amount the company can raise, and gives investors a higher rate of income tax relief. EIS allows a larger raise from companies within a longer age window, at a lower rate of relief. Many companies use SEIS first for their earliest funding and move to EIS for later rounds once the SEIS allowance is used.
How much can a company raise under SEIS and EIS?
SEIS is capped at 250,000 pounds as the lifetime total a company can raise across all SEIS investors, aimed at seed funding. EIS allows up to 5 million pounds a year and 12 million pounds over the company's lifetime, rising to 10 million pounds a year and 20 million pounds for knowledge-intensive companies that meet additional innovation and staffing tests. SEIS, EIS and venture capital trust investment all count toward the same lifetime risk-finance ceiling, so early SEIS use reduces the headroom available later. We map a company's funding path across rounds so that seed-stage decisions do not accidentally constrain a future EIS raise.
What is the risk-to-capital condition?
The risk-to-capital condition applies to both SEIS and EIS and has two parts. First, the company must be raising money to grow and develop its trade over the long term, which usually means using the funds to increase revenue, customers or headcount. Second, the investment must carry a genuine risk that the investor could lose more capital than they gain in tax relief. HMRC looks at the arrangements as a whole, so structures designed mainly to protect investor capital, or to return it through low-risk means, will fail. Genuine early-stage companies pursuing growth generally satisfy the condition without difficulty.
Can a company use both SEIS and EIS in the same round?
Yes, and it is common. A company can raise SEIS investment up to its lifetime SEIS limit and then raise EIS in the same round or a later one, provided it still meets the EIS conditions. The important rule is sequence: SEIS shares must be issued before EIS shares, because issuing EIS shares first can prevent the earlier SEIS claim. The company must also spend the required proportion of the SEIS money before the EIS shares are issued. We structure the share issues and their timing so both sets of investors keep their relief.
What are the investor limits and tax reliefs?
Under SEIS an investor can put in up to 200,000 pounds a year and claim 50 percent income tax relief, with capital gains reinvestment relief on part of a gain reinvested. Under EIS an investor can invest up to 1 million pounds a year, or 2 million pounds if at least half goes into knowledge-intensive companies, and claim 30 percent income tax relief, with capital gains deferral available. Both schemes offer capital gains tax exemption on the shares themselves when they are held for at least three years and the conditions remain met, plus loss relief if the company fails. The reliefs belong to the investor, not the company.
When can investors claim their SEIS or EIS tax relief?
Investors can claim once the company issues them an SEIS3 or EIS3 certificate. The company cannot issue these immediately: it must first have carried on its qualifying trade for at least four months, or spent at least 70 percent of the SEIS money, and then submit a compliance statement to HMRC. HMRC reviews the statement and, if satisfied, authorises the company to issue the certificates. The investor uses the certificate to claim relief through their tax return, and relief can usually be carried back to the previous tax year. Delays in filing the compliance statement are the most common reason investors wait for their certificates.
What happens if the company breaches the scheme rules after the raise?
Relief can be withdrawn or reduced if a disqualifying event occurs within three years of the investment. Common triggers include the investor selling the shares early, the company ceasing its qualifying trade, the shares acquiring preferential rights, or the company returning value to the investor. If relief is withdrawn, HMRC recovers the tax the investor originally claimed. Because the risk sits with investors, careful ongoing compliance protects the relationship and the company's ability to raise further rounds. We flag the three-year holding period and the events that can trigger clawback so founders manage the company within the rules.
