Investing in early-stage UK companies carries more risk than buying shares in established businesses, but the tax system offers substantial reliefs to offset that risk. For women with capital to deploy, the tax benefits of investing in startups can improve portfolio returns while supporting the diversity of British entrepreneurship.

HMRC operates three live venture capital schemes for individual investors: the Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs). Each has strict eligibility rules, annual limits and holding periods. This guide sets out the 2026/27 limits and what you need to do to claim them.

Tax benefits of investing in startups for women

Women remain under-represented in UK equity investment. The British Business Bank’s Small Business Equity Tracker 2024 reports that all-female founder teams received only around 2% of UK equity investment by value in 2023. At the same time, the 2019 Alison Rose Review of Female Entrepreneurship estimates that closing the gender entrepreneurship gap could add up to £250 billion to the UK economy.

Tax reliefs such as EIS and SEIS lower the effective cost of backing early-stage companies. For women investors, that can mean supporting women-led businesses while reducing the income tax bill on salary, dividends or other income. You can read more about the broader picture on our Women in Business: Key UK Facts page and in our analysis of the Female Founder VC Funding Gap.

Enterprise Investment Scheme (EIS)

EIS is designed for investment in early-stage trading companies. For 2026/27, HMRC allows you to claim 30% income tax relief on investments up to £1 million per tax year when you subscribe for new ordinary shares in a qualifying company. For knowledge-intensive companies, the annual limit rises to £2 million.

EIS qualifying companies

• The company must be unquoted, or listed on an approved market such as AIM.
• It must have fewer than 250 full-time equivalent employees, or fewer than 500 for knowledge-intensive companies.
• Gross assets must be no more than £15 million immediately before the share issue and £16 million immediately after.
• The company must carry on a qualifying trade for at least four months before you can claim relief.
• The company must not have raised money under EIS or VCT within the previous seven years, subject to exceptions for follow-on funding.

EIS income tax and CGT relief

• Income tax relief: 30% of the amount invested, up to £1 million per tax year, or £2 million for knowledge-intensive companies.
• Capital Gains Tax exemption: Gains on EIS shares are free of CGT if you hold them for at least three years and the company remains qualifying.
• Loss relief: If the company fails, you can offset the net loss against income tax or capital gains.
• CGT deferral: You can defer capital gains from other assets by reinvesting the gain in EIS shares.

Seed Enterprise Investment Scheme (SEIS)

SEIS supports very early-stage companies. For 2026/27, HMRC offers 50% income tax relief on investments up to £200,000 per tax year because the risk is greater than under EIS.

SEIS qualifying companies

• The company must have been trading for less than three years.
• It must have fewer than 25 full-time equivalent employees.
• Gross assets must be no more than £350,000 immediately before the share issue.
• The company must not have previously issued EIS or VCT shares.
• The maximum the company can raise under SEIS is £250,000.

SEIS income tax and CGT relief

• Income tax relief: 50% of the amount invested, up to £200,000 per tax year.
• Capital Gains Tax exemption: Gains on SEIS shares are free of CGT if held for at least three years.
• CGT reinvestment relief: You can claim 50% relief on capital gains reinvested in SEIS shares, up to £100,000 of gains.
• Loss relief: As with EIS, you can offset losses against income tax or capital gains.

Venture Capital Trusts (VCTs)

VCTs are listed companies that pool investor money and invest in a portfolio of small UK businesses. They suit investors who want exposure to startups without choosing individual companies.

VCT income tax and dividend relief

• Income tax relief: 30% of the amount invested, up to £200,000 per tax year.
• Tax-free dividends: Dividends from VCT shares are free of income tax.
• CGT exemption: Gains on the sale of VCT shares are free of CGT.

To keep the income tax relief, you must hold VCT shares for at least five years. VCTs are generally higher risk than mainstream listed funds, so check the trust’s track record, charges and sector focus before investing.

Social Investment Tax Relief closure

Social Investment Tax Relief (SITR) previously offered 30% income tax relief on investments in social enterprises and charities. The scheme closed to new investments on 6 April 2023. If you made a qualifying SITR investment before that date, existing reliefs continue subject to the original conditions, but you cannot claim SITR on new investments from 2023/24 onwards.

Claiming startup tax relief

You claim EIS, SEIS and VCT relief through your Self Assessment tax return. The company or fund will issue you a compliance certificate, such as an EIS3 or SEIS3 form, or a VCT certificate. You need the investment reference, date and amount.

For EIS and SEIS, you can normally claim relief in the tax year you invest, or treat part or all of the investment as made in the previous tax year. This carry back can be useful if you had a higher income tax liability in the previous year. VCT relief cannot be carried back.

Pre-investment checks

• Confirm the company or fund has advance assurance from HMRC that it qualifies for the scheme.
• Check you are not connected to the company. For EIS and SEIS, this generally means not being an employee, director with a substantial interest, or owning more than 30% of the shares.
• Understand the holding period: three years for EIS and SEIS, five years for VCTs.
• Remember that tax relief is not the only consideration. Startups can fail, and you could lose some or all of your capital.
• Take professional advice from a tax adviser or accountant if the investment is large or complex.

Conclusion and next steps

The tax benefits of investing in startups can be significant: up to 30% income tax relief through EIS and VCTs, and up to 50% through SEIS, plus CGT exemptions and loss relief. For women investors, these schemes offer a practical way to back early-stage UK businesses while managing tax.

Action steps:

1. Review your 2026/27 tax position and decide how much you can allocate to higher-risk investments.
2. Compare EIS, SEIS and VCT options against your risk appetite and portfolio goals.
3. Check HMRC advance assurance and company eligibility before committing capital.
4. Keep all compliance certificates and claim relief through your Self Assessment tax return.

For women founders seeking investment, see our Pitch Deck Guide for Female Founders UK.