EIS Checklist for Companies

The Enterprise Investment Scheme (EIS) is one of the most powerful ways for a growing UK company to attract investment, but the relief only sticks if your company, your shares and your timing all line up with HMRC's rules. This EIS checklist for companies walks through it in order: whether you qualify, how much you can raise, getting the shares right, the HMRC process, and the three-year rule that keeps the relief in place. It reflects the rules from 6 April 2026.

1. Does Your Company Qualify?

Start here, because nothing else matters if the company itself does not meet EIS's core conditions. To qualify, your company generally needs to be:

• Young enough. Within 7 years of its first commercial sale (extended to 10 years for a knowledge-intensive company, or KIC).
• Small enough on headcount. Fewer than 250 full-time-equivalent employees (500 for a KIC).
• Small enough on assets. Gross assets of no more than £30m immediately before the share issue, and no more than £35m immediately after it.
• Carrying on a qualifying trade. Most trades qualify, but some are excluded, and the company has to be doing genuine commercial activity rather than holding assets or chasing a low-risk return.

That last point is where most applications come unstuck: HMRC's risk-to-capital condition expects the money to fund real growth, with a genuine risk that investors could lose it. If you are unsure whether your trade or structure fits, it is worth reading why EIS advance assurance gets rejected before you spend time on an application.

2. How Much You Can Raise

EIS comes with annual and lifetime limits, and they are shared across EIS, SEIS and Venture Capital Trust (VCT) funding combined, not counted separately:

• Per year: no more than £10m a year across EIS, SEIS and VCT combined (£20m for a KIC).
• Over the company's lifetime: no more than £24m in total (£40m for a KIC).

Those ceilings include any SEIS you have already raised, so plan the whole journey, not just this round. To see what the relief is actually worth to an investor on a given amount, run the figures through our SEIS and EIS tax relief calculator.

3. Getting the Shares Right

The shares you issue have to qualify just as much as the company does. For EIS, they must be full-risk ordinary shares, paid up in full and in cash, with no preferential rights to your assets on a winding up. In other words, your EIS investors rank alongside everyone else if things go wrong; you cannot give them a safety net, because the relief is a reward for taking real risk.

You also have to use the money you raise within 2 years, on the qualifying trade or on preparing to carry it on. Your articles of association need to reflect all of this, and HMRC will check them, which is one of the documents you need for an advance assurance application.

4. The Process in Order

Doing the steps in the right sequence is half the battle. The path runs roughly like this:

• Get advance assurance first (recommended). Most investors expect it, and it confirms HMRC's view before money changes hands. Our guide to SEIS and EIS advance assurance covers how it works.
• Issue the shares and spend the money. Use the funds within 2 years on the qualifying trade.
• Trade for at least 4 months before you submit your EIS1 compliance statement to HMRC.
• Submit the EIS1 compliance statement once that four-month trading condition is met.
• Issue EIS3 certificates to your investors after HMRC has approved the EIS1. These are what your investors use to claim their relief.

Skip or reorder a step and your investors can be left unable to claim, so it is worth mapping the dates out before you raise.

5. Keeping the Relief (the Three-Year Rule)

Qualifying on day one is not the finish line. Your company and the shares have to keep meeting the EIS conditions for 3 years from the date the shares are issued. If the company stops qualifying inside that window, for example by switching to a non-qualifying trade or by the shares gaining preferential rights, your investors can lose relief they have already claimed, and HMRC can claw it back.

So the checklist does not stop once the money is in. Keep an eye on the conditions for the full three years, and take advice before any big change to the business or its share structure.

This article is a general guide and not tax or financial advice. The EIS rules and limits summarised here reflect the position from 6 April 2026 and depend on your company's circumstances, so always confirm the current rules with a qualified accountant or HMRC before you raise.