Date posted: 1st Nov 2025
The Enterprise Investment Scheme, or EIS for short, is all about helping small, risky businesses get the cash they need by giving investors some tax breaks when they subscribe for new shares in these companies.
It’s designed to get more people to invest in early-stage businesses by making it worthwhile with serious tax perks. But to get these tax benefits, the company you invest in has to meet some strict rules about how big they are, how much money they’re raising, and what they plan to do with that money.
If you’re an individual investor, you can get 30% off your income tax bill on the money you put in, up to £1 million a year. If you’re investing in what’s called a knowledge-intensive company, that limit goes up to £2 million. The tax breaks are meant to help balance out the fact that these smaller companies can be a bit of a gamble. So, you should only invest money you’re comfortable risking.
There are more perks too — you can put off paying Capital Gains Tax (CGT) on profits from your investments for as long as you hold them, and if things don’t go well and you lose money on the shares, you can get some tax relief for that loss. If things go well and the company is sold and you make a profit on your shares, this could be a tax free capital gain but as ever, certain tax rules need to be met for this exemption.
Just keep in mind, the income tax relief can only reduce your tax to zero for the year — it won’t give you a refund beyond what you owe. All these benefits make EIS a great option if you want to back fast-growing companies while saving on taxes, as long as you are aware of the risk.
More tax breaks exist for those companies that are smaller and qualify for the seed EIS scheme.
Whether you are an investor looking to claim EIS/SEIS tax relief or a company looking for assistance to raise finance under the schemes, we are here to help.
