There are lots of acronyms thrown around, when fundraising, about investor tax relief. Here is the quickest of breakdowns so you at least know what each means and whether you might qualify.

Tax benefits are critical for many UK investors and a requirement for others so be sure you are accessing the ones you qualify for and which make your proposition more attractive to potential investors. To be clear, these are benefits that an investor accesses, not the the investee. The intention of these schemes is to encourage more investment in early stage startups.

SEIS

What it stands for: Seed Enterprise Investment Scheme

Meant for: Very early stage startups doing their first fundraise(s)

Who/what qualifies: Startups with less than 25 employees trading no longer than 2 years and seeking up to £150k equity investment qualify for SEIS relief for their investors (doesn't have to be raised all at one)

What the investor gets: Reduce their tax bill by half the amount invested and any profit is free from capital gains tax

How do you get it: Apply for advanced assurance from HMRC to ensure your investors will qualify once you've completed your round

EIS

What it stands for: Enterprise Investment Scheme

Meant for: Startups doing subsequent rounds after they've maxed out the SEIS £150k allocation

Who/what qualifies: Startups with less than 250 employees and assets of less than £15m can raise up to £5m of EIS qualifying equity investment in any 12 month period

What the investor gets: Reduce their tax bill by 30% of amount invested and any profit is free from capital gains tax

How do you get it: Apply for advanced assurance from HMRC to ensure your investors will qualify once you've completed your round

Read more about SEIS & EIS investor tax relief

SITR

What it stands for: Social Investment Tax Relief

Meant for: Social enterprise-focused businesses and charities

Who/what qualifies: Registered charities, Community Benefit Societies, or Community Interest Companies (CIC) with less than 250 employees and assets of no more than £15m can raise up to £290k of debt or equity over a rolling 3 year period (£1.5m lifetime cap),

What the investor gets: Reduce their tax bill by 30% of amount invested and any profit is free from capital gains tax and hold over relief

How do you get it: Apply for advanced assurance from HMRC to ensure your investors will qualify once you've completed your round

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