Investing via Equity Crowdfunding Platforms: SEIS/EIS Tax Relief Explained (2026)
Crowdfunding platforms like Seedrs and Crowdcube market SEIS and EIS tax reliefs heavily, but the relief depends entirely on the individual company, not the platform. Here's how to check before you invest.
Why the platform doesn't determine the relief
Crowdfunding platforms such as those hosting early-stage equity pitches frequently badge listings as "SEIS eligible" or "EIS eligible" in their marketing. This status is genuinely useful information, but it is assessed and granted by HMRC to the individual company, not the platform — the platform is simply the marketplace connecting investors to that company's share offer.
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Open Income Tax calculatorTwo pitches on the same platform, raised in the same month, can have entirely different tax statuses: one might have full EIS approval, another might have only "advance assurance" (HMRC's preliminary, non-binding indication), and a third might not qualify for any relief at all, perhaps because the company is too large, too old, or in an excluded trade sector.
SEIS vs EIS at a glance
| Feature | SEIS | EIS |
|---|---|---|
| Income tax relief | 50% | 30% |
| Maximum annual investment (for relief) | £200,000 | £1,000,000 (£2m if excess is knowledge-intensive) |
| Minimum holding period | 3 years | 3 years |
| CGT exemption on gains (if held 3+ years) | Yes | Yes |
| Loss relief available | Yes | Yes |
| Company size limits | Very early stage, smaller gross assets/employee limits | Larger than SEIS, but still early-stage focused |
| CGT reinvestment relief | 50% of reinvested gain exempt | Deferral of gain (not exemption) |
Advance assurance vs an actual SEIS/EIS certificate
Before an investment round, companies commonly apply for advance assurance from HMRC — an informal, non-binding indication that the company is likely to qualify for SEIS or EIS based on the information provided. This is what most crowdfunding pitches display prominently.
Only once you have the actual SEIS3 or EIS3 certificate from the company — issued after HMRC confirms compliance following the investment — can you formally claim the income tax relief on your Self Assessment return. Some deals never progress to certificate stage if the company subsequently fails a qualifying condition.
Worked example: SEIS relief in practice
Suppose you invest £10,000 in a SEIS-qualifying company via a crowdfunding platform.
| Step | Amount |
|---|---|
| Investment | £10,000 |
| Income tax relief (50%) | £5,000 |
| Net cost of investment (after relief) | £5,000 |
If the company later fails entirely and the shares become worthless:
| Step | Amount |
|---|---|
| Net cost after income tax relief | £5,000 |
| Loss relief (at, say, 45% additional rate) | £2,250 |
| True net loss after both reliefs | £2,750 |
The combination of 50% upfront relief and loss relief on the remaining exposure substantially cushions the downside of an investment that would otherwise be a complete write-off — a key reason SEIS/EIS are structured this generously, given the high failure rate of very early-stage companies.
Why the 3-year rule matters
Selling SEIS or EIS shares before the 3-year minimum holding period generally claws back the income tax relief already given, in addition to losing the capital gains tax exemption on any growth. Crowdfunding platforms rarely offer meaningful liquidity for these shares in any case — most early-stage equity crowdfunding investments are illiquid for years regardless of the tax rules, so the 3-year minimum is rarely the binding constraint in practice.
Secondary market purchases don't qualify
Some crowdfunding platforms run secondary marketplaces allowing existing shareholders to sell to other investors. SEIS and EIS relief only applies to the original share subscription — if you buy shares from another investor on a secondary market, even through the same platform, you do not receive SEIS or EIS income tax relief on that purchase, though the CGT exemption on gains may still apply if the seller had originally qualified and certain conditions are met.
Practical checklist before investing
- Check whether the specific pitch has advance assurance or a confirmed HMRC ruling, not just the platform's general badge.
- Confirm whether you're buying newly issued shares (relief-eligible) or secondary market shares (not eligible for income tax relief).
- Understand the 3-year minimum hold and factor in the general illiquidity of early-stage shares regardless.
- Model your position on a worst-case (total loss) basis using the combined income tax relief and loss relief, not just the headline investment amount.
Use our income tax calculator to estimate your relief at your marginal rate, and the capital gains tax calculator to model the CGT exemption if the investment succeeds.
Frequently asked questions
Does every investment on a crowdfunding platform qualify for SEIS or EIS relief?
No. SEIS and EIS status is granted per company, not per platform, based on HMRC's assessment of that specific company's trade, size, age and structure. Some pitches on the same platform qualify for SEIS, some for EIS, and some for neither — always check the specific pitch's status, not the platform's general marketing.
How much income tax relief does SEIS give?
SEIS gives 50% income tax relief on investments up to £200,000 per tax year, provided you hold the shares for at least 3 years and the company continues to meet SEIS qualifying conditions.
How much income tax relief does EIS give?
EIS gives 30% income tax relief on investments up to £1 million per tax year (or £2 million if the excess is invested in knowledge-intensive companies), also subject to a 3-year minimum holding period.
What happens to the tax relief if the company fails?
If the company fails and the shares become worthless, you can typically claim loss relief in addition to having already received the upfront income tax relief, meaningfully reducing your net loss — though the income tax relief itself is not usually clawed back if the company genuinely traded and failed.
Can I get SEIS/EIS relief on shares bought on a secondary market?
No. SEIS and EIS relief is only available on newly issued shares subscribed for directly from the company, not shares bought second-hand from another investor, even if traded through the same crowdfunding platform's secondary marketplace.
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