EIS & SEIS in 2025: A Comprehensive Overview

Number of companies raising EIS funds and amounts raised 1993-94 to 2023-24

Based on the latest government report published by HM Revenue & Customs in May 2025.

The full report can be found here.

The UK's tax-advantaged investment schemes continue to play a vital role in supporting early-stage businesses, with the latest government statistics revealing significant shifts in investment patterns for the 2023-24 tax year. Here's what the data tells us about the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS).

Enterprise Investment Scheme (EIS): Market Correction After Record Highs

The EIS experienced its second consecutive year of decline in 2023-24, with 3,780 companies raising £1,575 million - a substantial 20% decrease from the previous year when 4,245 companies raised £1,971 million. This represents a continuation of the market correction following the exceptional investment levels seen in 2021-22.

The current funding levels have now dipped below pre-pandemic figures, suggesting the market is still adjusting to higher interest rates and a more cautious investment environment. This trend reflects broader challenges in the UK venture capital market.

New Companies Struggle for Share

A concerning trend emerges when examining new investment patterns. Only £309 million (20%) of total EIS investment went to companies raising funds for the first time in 2023-24, involving 1,010 new companies. This represents a significant shift from historical patterns and suggests established companies are capturing an increasingly larger share of available funding.

This trend is partly attributed to the introduction of risk-to-capital conditions, which have made it more challenging for new companies to qualify, and the expansion of SEIS limits, which may have redirected some early-stage funding.

Sector and Geographic Concentration Persists

Information and Communication companies dominated, securing £551 million (35% of all EIS investment). The top four sectors - Manufacturing, Wholesale and Retail Trade, Information and Communication, and Professional, Scientific and Technical - collectively accounted for 76% of all investment.

Geographically, the London and South East bias remains strong, with companies in these regions raising £997 million, representing 63% of all EIS investment. This concentration has remained consistent across recent years.

Investor Participation Declines

The number of investors claiming Income Tax relief under EIS dropped from 40,470 to 35,150 (13% decrease), with total investment on which relief was claimed falling by 12%. This decline may partly reflect investors shifting toward SEIS following its expanded limits and more generous tax relief rates.

Seed Enterprise Investment Scheme (SEIS): Expansion Drives Dramatic Growth

Limit Increases Fuel 51% Growth

SEIS experienced a remarkable transformation in 2023-24, with 2,290 companies raising £242 million - a substantial 51% increase from the previous year's £160 million. This dramatic growth directly results from the scheme's expansion in April 2023, which increased the company investment limit from £150,000 to £250,000.

New Companies Benefit from Expanded Access

The expansion particularly benefited new companies, with 1,535 companies raising SEIS funds for the first time, representing £181 million of investment. This 29% increase in funding for new companies demonstrates the scheme's success in supporting early-stage businesses.

Sector Patterns Mirror EIS

Similar to EIS, Information and Communication companies captured the largest share of SEIS investment at £99 million (41% of total). The next three largest sectors - Professional, Scientific and Technical, Wholesale and Retail Trade, and Manufacturing - together account for 35% of investment.

Geographic Distribution Remains Concentrated

SEIS shows similar geographic concentration to EIS, with London and South East companies securing 65% of total investment (£156 million), maintaining consistency with previous years.

Investor Response Overwhelmingly Positive

The number of investors claiming SEIS Income Tax relief increased from 8,245 to 10,145, with relief claimed rising by 47%. Notably, approximately 19% of companies now raise over £150,000 (previously the maximum), collectively accounting for 38% of all scheme investment.

The expansion allowing investors to claim relief on investments up to £200,000 (previously £100,000) has been well-received, with 3% of investors now investing over £100,000, representing 22% of all investment on which relief was claimed.

Social Investment Tax Relief (SITR): Scheme Closure

SITR concluded in April 2023, with no new investment permitted in 2023-24. The government will cease reporting SITR statistics from 2026 onwards, marking the end of this social enterprise funding mechanism.

Advance Assurance Applications: Steady Demand

EIS Applications Remain Stable

HMRC received 3,090 EIS advance assurance applications in 2024-25, a slight decrease of 60 from the previous year. The approval rate remains healthy at 76% for processed applications.

SEIS Applications Surge

SEIS advance assurance applications increased significantly to 3,195 in 2024-25, up 450 from the previous year. This 16% increase reflects growing interest following the scheme's expansion, with an impressive 85% approval rate for processed applications.

Key Implications for Investors and Companies

For Investors

- SEIS offers more attractive opportunities following its expansion, with higher investment limits and generous tax relief

- EIS remains suitable for larger investments, particularly in established companies

- Geographic and sector concentration suggests opportunities may exist in underserved regions and industries

For Companies

- Early-stage companies should prioritize SEIS qualification given its expanded limits and investor appeal

- EIS companies face increased competition, particularly new companies seeking first-time funding

- London and South East location continues to provide funding advantages

Market Outlook

The data suggests a maturing market where SEIS expansion has successfully supported early-stage companies, while EIS faces headwinds from higher interest rates and increased competition. The shift in investor preference toward SEIS, combined with its expanded limits, positions it as an increasingly important funding source for UK startups.

This comprehensive analysis reveals a UK investment landscape in transition, with SEIS emerging as a more dynamic funding mechanism while EIS adjusts to new market realities. The government's strategic expansion of SEIS appears to be achieving its intended goal of supporting early-stage business growth.