Multi-Round SEIS and EIS Funding: Sequencing, Limits and Follow-On Investment

By Steve Livingston FCA, founder of IP Tax Solutions. Technical sources reviewed: 21 September 2026.

A company can raise more than one SEIS or EIS round if each share issue meets the applicable conditions. There is no fixed maximum number of rounds. The main constraints are funding headroom, company and trade history, investor eligibility, share terms and the use of the money.

Where both schemes are used, SEIS shares must be issued on an earlier day than EIS shares. A same-day sequence is not enough. There is no current requirement to spend 70% of the SEIS funds before issuing EIS shares, but the separate SEIS compliance-statement filing conditions still apply.

Plan by share issue, not just by funding round

A commercial round can contain several legal share issues. Different investors may complete on different dates and the company may change between those dates. Record each issue, the money subscribed, share rights, relevant company position and intended scheme.

The SEIS eligibility guide explains the starting company conditions. Do not assume that qualifying for SEIS at seed stage establishes eligibility for EIS later.

SEIS must precede EIS by a day

Under ITA 2007 s.257DK, there must be no EIS or VCT investment in the issuing company on or before the SEIS share issue day. The restriction also applies to a company that is a qualifying subsidiary at the relevant SEIS issue date.

Issue the SEIS shares on an earlier day than the EIS shares. It is not enough for board minutes to record a SEIS issue at 10am and an EIS issue at 11am on the same day. Check the legal allotment and issue mechanics, not simply payment order or the dates on draft documents.

An EIS investment is defined by reference to the share issue and the subsequent provision of the compliance statement. Filing EIS1 later does not move the statutory investment date. A VCT investment can be an investment of any kind, not just a subscription for ordinary shares.

Advance subscription agreements and other conversion arrangements need the same analysis. A single conversion event covering every tranche may be incompatible with the intended sequence. Check the underlying instrument separately against the cash-subscription and qualifying-share requirements.

The old 70% sequencing rule has gone

The former requirement to spend at least 70% of earlier SEIS funding before an EIS issue was removed for relevant shares issued on or after 6 April 2015. It is not a reason to delay a current EIS round. HMRC VCM12040.

Do not confuse that repeal with the current SEIS1 filing rule. Before making a SEIS compliance statement, the company must have spent at least 70% of the money from the relevant issue on its qualifying business activity, or the relevant new qualifying trade must have been carried on for at least four months by the issuer or a qualifying 90% subsidiary. ITA 2007 s.257ED. Our SEIS1 guide explains that process.

Calculate funding headroom before every issue

SEIS has a £250,000 limit calculated under s.257DL, including the current issue, other same-day SEIS issues, specified earlier SEIS investments and relevant de minimis aid. The statutory calculation uses the prescribed three-year look-back. Trade-age and other company conditions separately restrict the ability to make later qualifying issues; the limit should not be treated as a renewable allowance.

For most companies, EIS annual and lifetime limits increased from 6 April 2026 to £10 million and £24 million. Knowledge-intensive companies generally have limits of £20 million and £40 million. Specified Northern Ireland companies retain lower limits, and further rules can restrict money employed in those companies. Current HMRC EIS guidance.

These are relevant-investment limits, not simply the total labelled EIS in the latest round. SEIS, EIS, VCT and other specified risk-finance investments can count. Group history, acquisitions and transferred trades may bring additional funding into the calculation. Keep a dated funding schedule with scheme, company, amount, issue date and use of money.

The annual limit uses a rolling 12-month period. The lifetime test in s.173AA applies at the issue date. A further test under s.173AB applies during Period B in specified circumstances involving acquired companies or transferred trades and use of the funds. It is not a blanket rule that every later excess automatically invalidates every earlier issue.

Can EIS funding continue after seven years?

Potentially. The standard initial investing period is generally seven years from the relevant first commercial sale, with special rules for knowledge-intensive companies. But the statute contains more than one route.

Under s.175A, the routes include investment within the initial period, qualifying investment to enter a new product or geographical market subject to the statutory investment-size test, and qualifying follow-on investment connected to an earlier relevant investment. Each has conditions that need to be worked through.

The earlier relevant investment need not itself have been EIS. Nor does one earlier qualifying investment automatically permit all future rounds for any purpose. Review the original business plan, activities funded, relevant investment dates and proposed use of the new money.

A new holding company or acquired business does not simply restart the clock. The relevant first-commercial-sale rules include group and predecessor-trade history.

Conditions to revisit when moving from SEIS to EIS

Size: SEIS permits no more than £350,000 gross assets immediately before issue and fewer than 25 FTE employees. General EIS gross-assets limits are now £30 million before and £35 million immediately after issue, subject to the specified-NI rules. The employee limit is fewer than 250 FTE, or fewer than 500 where the relevant KIC rules apply.

Trade and activity: EIS requires the statutory trading purpose throughout Period B, with qualifying preparation and R&D routes where relevant. It is not invariably necessary to have started making sales at issue. SEIS has the separate new-qualifying-trade conditions. EIS ss.179 and 181.

Financial health: both EIS and SEIS have a financial-health condition at issue. Assess the actual company circumstances, rather than equating losses with automatic failure or assuming a proposed funding round cures difficulty. EIS s.180B and SEIS s.257DE.

Shares and arrangements: review cash subscription, payment, redemption and winding-up rights and prohibited dividend preferences. Not every dividend preference is prohibited, but the precise terms matter. EIS s.173 and SEIS s.257CA.

Investors: a person eligible for SEIS is not automatically eligible for later EIS. Revisit director remuneration, employment, associates, substantial interests and acquisition rights. The director investment guide explains the differences.

Use the money within the correct deadline

For EIS, money generally must be employed within two years of issue, but the specified trade/preparation route can use a deadline measured from later trade commencement. The legislation also restricts funding acquisitions of companies, trades and specified assets. ITA 2007 s.175.

SEIS has its own spending requirement before the end of Period B, broadly three years after issue, with the statutory treatment of insignificant amounts. s.257CC.

Keep expenditure evidence for each issue and qualifying business activity. A general cash balance or a later investment does not establish that earlier funds were used as required.

Knowledge-intensive companies

KIC status needs an operating-cost condition and either the innovation or skilled-employee condition. Broadly, the cost alternatives are 15% R&D or innovation expenditure in one relevant year, or 10% in each of three relevant years. The statutory period and group calculations matter. ITA 2007 s.252A.

Where higher limits are needed, establish the company's status for the proposed investment and identify any continuing conditions. Do not rely on a sector label or assume an earlier conclusion remains valid for every future issue.

Advance assurance and compliance

Advance assurance provides HMRC's view on the disclosed proposed investment within the service's scope. It is not a guarantee of individual investor relief or future compliance. Materially changed arrangements may require a new application. Use our advance assurance guide for the documents and current process.

After shares are issued, prepare the appropriate compliance statements and supporting records for the relevant issues. Monitor subsequent changes such as acquisitions, buybacks, alterations to share rights or investor employment before implementing them.

Review the next round

Contact IP Tax Solutions with the funding history, proposed issue dates, ownership structure and use of money. We can agree a review of the available headroom, qualifying route and transaction documents before completion.

This article provides general information. Each share issue and investor requires a separate eligibility assessment.