SEIS and EIS tax relief calculator

Income tax relief is a percentage of the amount invested, taken off the investor's income tax bill: 50% under SEIS, on up to £200,000 a year, and 30% under EIS, on up to £1 million a year (£2 million if at least £1 million goes into knowledge-intensive companies). The relief cannot be more than the tax the investor owes, and it is kept only if the shares are held for at least 3 years.

If the company fails, the investor can set the loss against their income, less the income tax relief already given. The calculator applies your top rate of income tax to that figure to show the most you could lose. On the upside, gains on the shares are free of Capital Gains Tax once the 3 years are up.

Reinvesting a gain from another asset adds a second relief. Under SEIS, half of the reinvested amount becomes exempt from Capital Gains Tax (on up to £200,000). Under EIS, the whole gain can be deferred until the EIS shares are sold, but the tax is postponed rather than removed.

An additional-rate taxpayer invests £10,000 in a company's SEIS round. Income tax relief is 50%, so £5,000 comes off their tax bill and the investment costs them £5,000. If the company fails, they can claim loss relief on the £5,000 at 45%, worth £2,250, so the most they lose is £2,750, or 27.5p for every £1 invested.

The same £10,000 under EIS earns £3,000 of income tax relief, costs £7,000, and in the worst case loses £3,850 after £3,150 of loss relief (38.5p per £1).

If a higher-rate taxpayer also reinvests a £20,000 gain into the £10,000 of SEIS shares, half of the £10,000 reinvested, £5,000, is exempt from Capital Gains Tax, saving £1,200 at 24%.