Launching a tech startup in the UK is an exciting yet complex journey. Between building your product, assembling a team, and pitching to investors, tax planning might feel like an afterthought. However, ignoring the powerful investment incentives available—such as the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS)—can mean missing out on crucial funding opportunities. This is where working with accountants for tech startups becomes more than a convenience—it becomes a competitive advantage.
What Are SEIS and EIS?
The UK government supports the SEIS and EIS programs, which are intended to promote investment in startups and expanding companies.These schemes offer generous tax reliefs to investors who back qualifying startups, making them far more likely to leap with a high-risk, high-reward company.
SEIS provides capital gains tax exemptions and up to 50% income tax reduction for very early-stage firms. EIS, on the other hand, supports more developed startups and offers income tax relief up to 30%, along with loss relief and capital gains deferral. Understanding which scheme your business qualifies for—and how to make the most of it—is not something to wing. It requires precise compliance and financial structuring, which is a key area where tech startup accountants excel.
Why SEIS/EIS Is a Game Changer for Founders
Early-stage startups often struggle to secure funding. Even when they have a strong product and a talented team, risk-averse investors might hesitate. SEIS and EIS help reduce that risk, offering financial incentives that sweeten the deal.
But there’s a catch. To qualify, your startup must meet a strict set of criteria involving business structure, trading activity, and the use of funds raised. Furthermore, the appropriate paperwork needs to be submitted on time. Any misstep can lead to disqualification, which can cost you valuable investor interest.
This is where accountants for tech startups like JungleTax step in. They don’t just crunch numbers; they prepare your financials, ensure compliance, and structure your business for long-term tax efficiency.
Eligibility Criteria: Avoid Costly Mistakes
Your business must be under two years old, employ less than twenty-five people, and have gross assets under £350,000 in order to qualify for SEIS. Up to 250 employees with £15 million in assets are permitted under EIS criteria, which also raise the age to seven years. But qualifying on paper doesn’t mean your application is airtight.
If your business doesn’t demonstrate its commercial risk, or if it fails to spend funds in line with HMRC’s guidelines, you could lose eligibility. With the support of specialist accountants for tech startups, these risks are mitigated. They guarantee that your application satisfies all legal standards and strategically complements your overarching business objectives.
Getting Advance Assurance
Most serious investors will ask whether your business has “advance assurance” from HMRC. This is essentially a pre-approval stating that your company will qualify for SEIS or EIS once shares are issued. It gives investors confidence that they’ll receive the tax relief promised.
Obtaining advance assurance involves more than filling out a form. You must prepare detailed financials, describe your business plan clearly, and outline how you’ll use the funds. Accountants for tech startups understand how to present this information in a way HMRC wants to see it. Their experience can speed up the approval process and avoid unnecessary rejections.
Investor Relations: The Accounting Side
Once you raise funds under SEIS or EIS, your job isn’t done. You must issue shares correctly, maintain meticulous records, and submit SEIS/EIS1 forms to HMRC.These produce the compliance certificates your investors require in order to be eligible for tax relief. Late or incorrect filings can jeopardise your relationship with investors and damage your startup’s credibility.
This is why many founders retain their startup accountants well beyond the fundraising phase. Not only do they keep the financials tidy, but they also ensure ongoing compliance with HMRC regulations. This level of oversight builds trust and shows investors you take financial governance seriously.
Tax Strategy Beyond SEIS/EIS
Even if SEIS and EIS are effective, there are other tax methods that are worth considering. R&D tax credits, capital allowances, and VAT registration thresholds all play a role in shaping a profitable financial future. Coordinating these moving parts takes expertise—especially in the fast-paced tech sector.
When you work with accountants for tech startups, you gain more than just SEIS/EIS guidance. You get a financial roadmap tailored to your growth. Whether you’re scaling toward Series A or planning your first exit, their insight helps you avoid tax traps and keep more of what you earn.
Working with JungleTax
At JungleTax, we specialise in helping ambitious founders stay financially compliant while making the most of government incentives. Our team understands the unique needs of tech startups, from fundraising rounds to year-end reporting. We don’t just prepare your books—we become part of your strategic growth team.
If you’re exploring SEIS or EIS as part of your fundraising journey, don’t risk going it alone. A A single error could set you back months.Let our expert team ensure every box is ticked so you can focus on what matters: building your business.
Let’s connect—just a phone call or click away.
Email: hello@jungletax.co.uk
Phone: 0333 880 7974
FAQs
What’s the difference between SEIS and EIS?
SEIS is for very early-stage startups with more generous reliefs, while EIS is for more developed startups with higher funding limits and different criteria.
How do I know if my startup qualifies for SEIS/EIS?
You must meet HMRC’s criteria on company age, size, sector, and use of funds. A qualified accountant can assess your eligibility and prepare your application.
Can I apply for both SEIS and EIS?
Yes, many startups raise an initial SEIS round and then follow up with EIS funding as they grow. Your accountant can help you plan this sequence.
What happens if I lose SEIS/EIS status after raising funds?
Your investors could lose their tax reliefs, leading to legal and reputational damage. That’s why expert compliance is critical throughout the process.
Do investors care about SEIS/EIS?
Absolutely. Many angel investors and funds will only invest if your company qualifies. It significantly lowers their risk and makes your startup more attractive.