EIS vs SEIS vs VCT: UK tax relief rates, limits & rules compared for 2026/27
EIS, SEIS and VCT all give UK investors income tax relief for backing small, unquoted companies, and most comparison articles line them up in one table as if their limits all sit on the same scale. They don't. Each scheme has a separate investor-side limit (how much one person can put in and claim relief on) and a separate company-side limit (how much one business can raise, and how big it can be). The November 2025 Budget moved both sets of numbers at once — cutting VCT income tax relief and doubling the EIS/VCT company limits — which is exactly where the two scales get mixed up. This page keeps them apart, and runs the 2026/27 figures through two worked examples.
The three schemes at a glance (investor side, 2026/27)
| Scheme | Income tax relief | Investor's annual limit | Minimum holding period | Carry back to prior year? |
|---|---|---|---|---|
| SEIS | 50% | £200,000 | 3 years | Yes |
| EIS | 30% | £1,000,000 (£2,000,000 if the excess over £1m goes into knowledge-intensive companies) | 3 years | Yes |
| VCT | 20% (was 30% before 6 April 2026) | £200,000 | 5 years | No |
Relief is given against the Income Tax you'd otherwise owe for the tax year, not as a cash refund beyond that liability. SEIS and EIS both let you carry the whole investment back and claim relief as if you'd made it in the previous tax year instead — useful if your income (and tax bill) was higher last year. VCT relief has no carry-back: you get it for the tax year you actually subscribe in, at whatever rate applies that year.
What actually changed for VCTs on 6 April 2026
The only rate that moved in the November 2025 Budget was the VCT one. SEIS stayed at 50%, EIS stayed at 30%; only VCT income tax relief fell, from 30% to 20%, for shares issued from 6 April 2026 onward. Shares issued before that date keep the 30% rate they were bought under.
| Before 6 April 2026 | From 6 April 2026 | |
|---|---|---|
| VCT income tax relief rate | 30% | 20% |
| Relief on the full £200,000 annual limit | £60,000 | £40,000 |
An investor who puts the full £200,000 into a VCT in 2026/27 gets £20,000 less relief than the same investment would have earned a year earlier — even though the amount invested, the holding period, and the tax-free dividend and growth treatment (below) are all unchanged.
Don't confuse investor limits with company limits
The figures above are what one investor can claim. A separate set of rules caps how much a single company can raise and how large it can be — and this is where SEIS sits on a completely different scale from EIS and VCT, which in turn share one test between them.
| Company-side limit | SEIS | EIS / VCT, before 6 April 2026 | EIS / VCT, from 6 April 2026 |
|---|---|---|---|
| Gross assets, before the share issue | £350,000 | £15,000,000 | £30,000,000 |
| Gross assets, immediately after | n/a — single £350,000 test | £16,000,000 | £35,000,000 |
| Annual amount the company can raise | £250,000 (lifetime, see below) | £5,000,000 (£10,000,000 if knowledge-intensive) | £10,000,000 (£20,000,000 if knowledge-intensive) |
| Lifetime amount the company can raise under the scheme | £250,000 | £12,000,000 (£20,000,000 if knowledge-intensive) | £24,000,000 (£40,000,000 if knowledge-intensive) |
SEIS exists for genuinely tiny, very early-stage companies: a £350,000 gross assets ceiling is a fraction of the £15–35 million range EIS and VCT companies are allowed. The Budget's doubling only touched the EIS/VCT company-side numbers; SEIS's £350,000 gross assets test and £250,000 lifetime funding limit were untouched. A company can raise money under SEIS first, while still tiny, then move on to EIS or VCT funding later once it outgrows the SEIS thresholds — that's the normal lifecycle the two schemes are designed around.
Worked example: spreading £50,000 across all three schemes
An investor with £50,000 to allocate for 2026/27 splits it £20,000 into a qualifying SEIS company, £20,000 into a qualifying EIS company, and £10,000 into a VCT:
- SEIS: £20,000 × 50% = £10,000 relief
- EIS: £20,000 × 30% = £6,000 relief
- VCT: £10,000 × 20% = £2,000 relief
Total relief: £18,000 against a £50,000 outlay, so the net cost of the £50,000 is £32,000 — before accounting for what happens to any capital gain on disposal, covered next. Had the whole £10,000 gone into the VCT before 6 April 2026 instead, that slice alone would have earned £3,000 (at 30%) rather than £2,000 (at 20%) — the £1,000 difference the rate cut makes on this portion.
What happens to your gains: three different mechanisms, not one
All three schemes also touch Capital Gains Tax, but not in the same way, and this is a common source of confusion:
| Scheme | CGT treatment |
|---|---|
| SEIS | Reinvestment relief: 50% of a chargeable gain reinvested into SEIS shares (up to your £200,000 annual SEIS limit) is permanently exempt from CGT — a maximum of £100,000 of gain exempted. The SEIS shares' own gain is then also exempt on disposal after the 3-year hold, provided Income Tax relief wasn't withdrawn. |
| EIS | Deferral relief: an unlimited chargeable gain reinvested into EIS shares is deferred, not exempted — it comes back into charge when the EIS shares are eventually disposed of. The EIS shares' own gain is separately exempt after the 3-year hold. |
| VCT | No deferral or reinvestment relief exists for VCTs. Instead, dividends from the VCT and any growth in the VCT shares themselves are entirely tax-free from day one, with no gain to report regardless of how large it is. |
SEIS's 50% exemption permanently removes half the reinvested gain from tax. EIS's deferral only postpones the tax bill on the original gain to a later date. VCT skips the mechanism entirely by making the VCT's own returns tax-free outright. Treating all three as "the same kind of CGT break" is the easiest way to misstate how one of them actually works.
Holding periods and clawback
Sell before the minimum holding period — 3 years for SEIS and EIS, 5 years for VCT — and the Income Tax relief you already claimed is clawed back, normally by HMRC adjusting your tax for the year relief was given (not the year of sale). The clock runs from the date the shares were issued, not the date you claimed relief, which can be up to a year later if you used carry-back.
Quick answers
| Question | Answer |
|---|---|
| Did EIS or SEIS relief rates change in the 2025 Budget? | No — only VCT's rate changed. SEIS stays at 50%, EIS stays at 30%. |
| Does the VCT rate cut apply to VCT shares I already hold? | No — it only applies to shares issued from 6 April 2026 onward. |
| Can I carry a VCT investment back to the previous tax year like SEIS/EIS? | No — VCT relief has no carry-back facility. |
| Is the £350,000 SEIS gross assets test the same test as EIS/VCT's? | No — SEIS uses its own, much lower, £350,000 ceiling; EIS and VCT share a separate £30m/£35m test (from 6 April 2026). |
You can practice questions on EIS relief, alongside the rest of UK Income Tax, on the UK Income Tax practice quiz.
This explainer covers UK Income Tax and Capital Gains Tax reliefs for the 2026/27 tax year. It's educational material only, not personal investment or tax advice — qualifying rules for individual companies are detailed and fact-specific, so check current HMRC guidance or a qualified adviser before relying on any of these figures for a real investment decision.
Source: GOV.UK, HMRC Self Assessment helpsheet HS393 "Seed Enterprise Investment Scheme" (2026 edition); GOV.UK, HMRC Venture Capital Schemes Manual, VCM30100 (SEIS overview) and VCM50010 (VCT overview); GOV.UK, Autumn Budget 2025 policy documents on Income Tax reliefs for venture capital schemes.
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