The seven-year rule, knowledge-intensive status, and the April 2026 limits that brought far larger companies back into scope.
EIS advance assurance is HMRC’s written opinion, given before shares are issued, that a proposed share issue is likely to qualify under the Enterprise Investment Scheme. Like its SEIS equivalent it is discretionary, non-statutory and carries no right of appeal — but investors and funds routinely ask for it, so it functions as a gate on the round.
The mechanics of applying are much the same as for SEIS. What differs is what HMRC is testing. SEIS asks whether you are early enough. EIS asks whether you are still young enough and still small enough — and since 6 April 2026 the answer is yes for a far wider set of companies than before.
The Autumn Budget 2025 package roughly doubled the EIS company limits. If you were told a few years ago that your company had outgrown EIS, that advice may now be wrong.
| Company limit | Before 6 Apr 2026 | From 6 Apr 2026 |
|---|---|---|
| Annual raise | £5m | £10m |
| Annual raise — knowledge-intensive | £10m | £20m |
| Lifetime raise | £12m | £24m |
| Lifetime raise — knowledge-intensive | £20m | £40m |
| Gross assets before the share issue | £15m | £30m |
| Gross assets immediately after | £16m | £35m |
Investor relief did not change. EIS income tax relief remains 30% on up to £1,000,000 per tax year, or £2,000,000 where at least £1,000,000 goes into knowledge-intensive companies. Some commentary published in 2026 reports EIS relief falling to 20% — that is the VCT rate change, not EIS. If an investor raises it, they have read a source that conflated the two.
Companies with gross assets between £15m and £30m, previously excluded outright, may now qualify. And companies that hit the old £12m lifetime cap may have fresh headroom under the £24m limit. Both are worth checking before assuming EIS is closed to you.
| Condition | EIS requirement (2026/27) |
|---|---|
| Age | Generally within 7 years of first commercial sale (10 for knowledge-intensive) |
| Employees | Fewer than 250 full-time equivalents (500 for knowledge-intensive) |
| Gross assets before / after | £30m / £35m |
| Annual raise | £10m (£20m knowledge-intensive) |
| Lifetime raise | £24m (£40m knowledge-intensive) |
| Investor income tax relief | 30% |
| Investor annual limit | £1m (£2m with at least £1m into knowledge-intensive companies) |
| Listing | Unquoted or AIM; no arrangements to list on a recognised exchange |
| Control | Not controlled by another company; only qualifying subsidiaries |
| Shares | New, fully paid ordinary shares, subscribed for in cash |
Where the company is part of a group, the employee count applies to the group as a whole. Group structures also affect the gross assets test, and companies with certain kinds of subsidiary face tighter limits — if you have subsidiaries, treat the headline figures above as a starting point rather than the answer.
As with SEIS, the mechanical tests are not the whole story. The company must be seeking to grow and develop over the long term, and the investment must carry a genuine risk of losing capital greater than the expected net return. Arrangements that look built around the relief rather than around growth fail this regardless of the arithmetic.
Dealing in land or shares, banking and financial services, legal and accountancy services, property development, farming, hotels and nursing homes, and most energy generation cannot use EIS. If part of your trade sits near an excluded category, address it in the application rather than leaving HMRC to find it.
For a scaling company this is the most common blocker, and it catches founders out because the clock does not start at incorporation.
The seven years run from your first commercial sale — the first time the company sold goods or services commercially, not the date you registered at Companies House and not the date you started building. A company incorporated in 2016 that did not sell anything until 2021 still has runway. A company incorporated in 2021 that sold something in its first month may have less than the founders assume.
Knowledge-intensive companies get ten years instead of seven. There are also limited provisions for later investment where a company has previously raised risk finance within the initial investing period, so being past the seven years is not always fatal — but it moves you into territory where the application needs to be argued rather than simply filed.
Work out and evidence your first commercial sale date early. It determines whether you are applying for EIS at all, and it is the fact most likely to be challenged.
Knowledge-intensive company (KIC) status relaxes the limits that matter most: ten years instead of seven, 500 employees instead of 250, £20m a year and £40m lifetime, and a £2m investor annual limit.
To qualify, the company and any qualifying subsidiaries must have fewer than 500 full-time equivalent employees when shares are issued, and must meet an operating-costs test on research, development or innovation spending, or have a skilled-workforce condition satisfied alongside relevant innovation activity.
You only need to apply as knowledge-intensive if you actually need the relaxation — because you are raising more than the standard limits allow, because the company is older than the standard age limit, or because an investor wants the higher £2m personal limit. If none of those apply, claiming KIC status adds evidence requirements without adding benefit. HMRC will only give an opinion on KIC status where the raise exceeds the usual limits.
If you are claiming KIC status because of R&D activity, that same activity may support an R&D tax relief claim — the two are assessed separately, but the underlying evidence overlaps.
HMRC does not accept speculative EIS applications from companies that have never raised under a venture capital scheme. You must give the name and address of each prospective investor and the amount each intends to invest, and show a serious expectation that those named individuals will invest the stated amounts. Naming a couple of small cheques against a large target will not clear the bar.
Companies that have already raised under SEIS, EIS, VCT or SITR are not automatically rejected for leaving investor details out — which is the common position for an EIS round following an earlier SEIS round. Supplying them anyway usually helps, particularly for evidencing the risk-to-capital condition.
Where a fund manager, promoter or platform is involved you must disclose it and evidence their engagement. Failure to disclose an intermediary invalidates any assurance HMRC gives. The rule is set out in full on our SEIS advance assurance page, and it applies identically here.
The step-by-step mechanics are the same for both schemes — see how to apply for SEIS advance assurance for the detailed walkthrough, and the advance assurance checklist to work through it item by item.
HMRC typically responds in around four to six weeks, and the timetable is HMRC’s. Apply at least eight weeks before your target close. Periods around the end of the tax year run longer. See how long advance assurance takes for the full timeline, including why EIS applications more often generate follow-up questions.
We prepare and submit your application on a two-working-day turnaround from receiving complete information. The decision timetable belongs to HMRC. Any adviser guaranteeing a clearance turnaround is guaranteeing something that is not theirs to give.
There is no formal expiry, but the assurance is given on the facts presented. If the raise changes materially — amount, share class, trade, investor group, or a much later issue date — go back to HMRC rather than rely on it.
| SEIS | EIS | |
|---|---|---|
| Stage | Pre-revenue / earliest | Scaling, with traction |
| Age test | Under 3 years trading | 7 years from first commercial sale (10 KIC) |
| Gross assets before | £350,000 | £30m |
| Employees | Fewer than 25 FTE | Fewer than 250 FTE (500 KIC) |
| Company raise limit | £250,000 lifetime | £10m/yr, £24m lifetime |
| Investor relief | 50% | 30% |
| Capital gains treatment | 50% reinvestment exemption — permanent | Deferral — postponed, not cancelled |
| Directors investing | Yes, if under 30% | Controlling directors excluded |
A single advance assurance application can cover both schemes. The sequencing rule is the one to get right: where SEIS and EIS shares are issued in the same accounting period, the SEIS shares must be issued first. Getting that backwards can cost the SEIS relief outright. Most companies exhaust the £250,000 SEIS allowance first, because 50% relief is the stronger hook, then use EIS for larger cheques.
For the underlying reliefs on both schemes, see SEIS and EIS tax relief for startups.
Unlike advance assurance, which is a one-off event, the qualifying conditions have to keep being true. A change of control, a move into an excluded activity, or a share buyback inside three years can cost your investors their relief long after the round has closed.
| What happens | Underlying cause |
|---|---|
| Refused on age | More than 7 years since first commercial sale, with no KIC status and no earlier qualifying risk finance |
| Refused on size | Group employee count or gross assets exceed the limits once subsidiaries are consolidated |
| Rejected as speculative | First-time raiser with no named prospective investors |
| Extended questioning | Trade sits near an excluded activity and the application does not address it |
| Risk-to-capital challenge | Structure reads as engineered around the relief |
| Assurance later invalid | Intermediary, prior funding or group structure not disclosed |
| KIC claim collapses | Claimed knowledge-intensive status without needing it, and could not evidence the operating-costs test |
We prepare and submit EIS advance assurance applications for UK companies, and handle the compliance that follows so the relief actually reaches investors.
Engagements are led by Godwin Pinto ACA (ICAI), former PwC and a member of ICPA. See also SEIS advance assurance, our fundraising support service, the SEIS & EIS tax relief calculator, and startup accountants.
No. There is no legal requirement to obtain advance assurance before issuing EIS shares. The service is discretionary and non-statutory, with no right of appeal. Most investors and funds ask to see it before committing, so it operates as a practical gate on the round rather than a legal one.
HMRC typically responds in around four to six weeks, and the timetable is HMRC's alone. Apply at least eight weeks before your target close. AccTek prepares and submits the application on a two-working-day turnaround from receiving complete information; the decision timetable belongs to HMRC.
No. EIS income tax relief remains 30% on up to £1,000,000 per tax year, or £2,000,000 where at least £1,000,000 goes into knowledge-intensive companies. The rate that fell to 20% from 6 April 2026 is Venture Capital Trust relief, not EIS. Several published sources conflate the two.
From the company's first commercial sale — the first sale of goods or services on a commercial basis — not from incorporation. Knowledge-intensive companies get ten years. Companies that raised qualifying risk finance within the initial investing period may still be able to raise later, but the position needs to be argued rather than assumed.
Fewer than 250 full-time equivalent employees at the time the shares are issued, or fewer than 500 for a knowledge-intensive company. Where the company is part of a group, the limit applies to the group as a whole. Part-time employees count pro rata and directors count as employees.
Only if you need the relaxation — because the raise exceeds the standard limits, the company is older than the standard age limit, or an investor wants the higher £2m personal limit. HMRC will only give an opinion on knowledge-intensive status where the amount being raised is above the usual limits. Claiming it unnecessarily adds evidence requirements without adding benefit.
Yes. Where SEIS and EIS shares are issued in the same accounting period, the SEIS shares must be issued first. Most companies exhaust the £250,000 SEIS lifetime allowance before moving to EIS, because 50% relief is a stronger hook for angel investors than 30%.
Yes. The company must continue to meet the qualifying conditions for three years after the share issue. A change of control, a move into an excluded activity, or certain share buybacks within that window can cause relief to be withdrawn from investors. Investors must also hold their shares for at least three years.
We’ll check the age and size tests properly before you spend eight weeks waiting on HMRC.
General information for UK founders based on EIS rules for the 2026/27 tax year and HMRC’s published guidance, current at the date of writing. Advance assurance is discretionary and non-statutory, and tax reliefs depend on individual circumstances. This page is not tax advice — speak to an accountant about your specific position.
AccTek is a member firm of the Institute of Certified Practising Accountants (ICPA). Our accountants have a wide range of qualifications and accreditations from trusted professional bodies such as the AAT, ICPA, and ACCA.
