EIS

Also called: Enterprise Investment Scheme

TL;DR

UK scheme offering investors 30% income-tax relief on up to £1m/yr (£2m if knowledge-intensive) in qualifying UK growth-stage companies.

The Enterprise Investment Scheme (EIS) is the bigger sibling of SEIS. It targets UK companies past the SEIS stage, under seven years old (10 for knowledge-intensive companies), fewer than 250 employees, and under £15m of gross assets, and lets each company raise up to £5m of EIS investment per year and £12m in its lifetime.

Individual investors get 30% income-tax relief, capital-gains exemption after three years, capital-gains deferral on other gains rolled into EIS shares, and loss relief on failed investments. Almost every UK angel and a meaningful slice of UK seed funds will only invest if the company is EIS-qualifying, make-or-break for the round.

Formula

Investor Relief = min(Investment, £1,000,000) × 30%

Investment , Amount subscribed for EIS-eligible shares in the tax year
£1,000,000 , Annual standard EIS cap per investor (rises to £2m where £1m+ is invested in knowledge-intensive companies)

Worked example

A UK Series-A investor writes £200,000 EIS into a SaaS company. They claim £60,000 income-tax relief (200k × 30%), defer £150,000 of unrelated capital gains by rolling into EIS, and pay £0 CGT on the eventual £2m exit, net IRR is materially higher than the same cheque without EIS treatment.

Common pitfalls

•Failing the 'risk to capital' condition by shipping a too-safe revenue model.
•Issuing more than £5m of EIS in a 12-month window and disqualifying the excess.
•Triggering a connected-party rule when an angel later joins the board within 30 days of investing.

When this shows up in a pitch deck

Pitch decks for UK Series A explicitly state 'EIS-qualifying, Advance Assurance attached in the data room' on the deal terms slide.

Related terms

SEIS

UK tax-advantaged scheme giving angels up to 50% income-tax relief on up to £200k/yr invested into very early-stage UK companies.

Advance Assurance

Non-binding HMRC pre-clearance that a UK company's planned share issue likely qualifies for SEIS or EIS, used to de-risk angel investment.

VCT

UK listed vehicle pooling retail money into qualifying small-company investments, giving subscribers 30% income-tax relief on up to £200k/yr.

ASA (Advance Subscription Agreement)

UK SEIS/EIS-compatible alternative to a SAFE: cash paid up-front for shares issued at the next round, with a 6-month longstop to keep relief.

Series A

The first major priced round, typically $8M to $20M raised on the strength of early product-market fit and a repeatable go-to-market motion.

Use EIS in your next pitch deck

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