How does the Knowledge Intensive Company (KIC) designation work for EIS in the UK?

Full answer

Knowledge Intensive Companies were introduced in Finance Act 2015 to allow higher EIS investment limits for R&D-intensive businesses. A company qualifies as a KIC if it meets one of two primary conditions and the operating costs condition: Primary conditions (either): (1) R&D intensive: in each of the 3 years before the share issue (or the company's life if shorter), at least 15% of operating costs were R&D or innovation costs; OR (2) Innovation condition: in at least one of the last 3 years, at least 10% of operating costs were R&D/innovation costs AND the company either holds an innovation patent or has recently created jobs requiring significant IP skills. Operating costs condition: the company must have operating costs of at least £170,000 in the relevant period. KIC limits: Annual investment by a single investor receiving EIS relief: £2,000,000 (versus £1,000,000 standard). Company annual fundraising limit (EIS + SEIS combined): £10,000,000 (versus £5,000,000 standard). Company lifetime limit: £20,000,000. Age condition: KICs have a 10-year "relevant period" from first commercial sale (versus 7 years for non-KIC EIS companies), meaning older companies can still qualify. EIS tax reliefs on KIC shares are the same as standard EIS: 30% Income Tax relief, CGT exemption on disposal after 3 years, loss relief. SEIS comparison: SEIS has its own separate £250,000 company limit and is not affected by KIC designation. HMRC pre-approval: companies should seek Advance Assurance from HMRC before issuing KIC EIS shares. HMRC guidance: VCM15000.

Try the calculator

More answers

• How does the R&D SME tax credit work in the UK for 2026/27?