The Enterprise Investment Scheme offers some of the most generous tax reliefs available to UK investors — 30% income tax relief, capital gains exemption, loss relief, inheritance tax advantages. What it does not offer is an obvious front door. There is no EIS exchange, no EIS ISA wrapper, no button marked "invest in EIS."
This guide explains how to invest in EIS in practice: the routes into qualifying companies, the checks to make before committing, the mechanics of subscribing for shares, and how to actually claim the reliefs once you have. It assumes you already understand what EIS is — if not, start with our What is EIS? guide.
How to invest in EIS — at a glance
| Routes in | Direct investment into qualifying companies; building a diversified EIS portfolio across multiple companies |
|---|---|
| Who can invest | UK taxpayers not "connected" to the company (broadly, under 30% ownership and not an employee) |
| Annual investor limit | £1 million (£2 million if the excess is in knowledge-intensive companies) |
| Minimum investment | Set by each company or platform — commonly from around £5,000–£10,000 direct |
| Shares required | New ordinary shares, subscribed for in cash, full risk |
| Holding period | 3 years minimum to retain reliefs |
| Relief claimed via | EIS3 certificate → Self Assessment (or PAYE code adjustment) |
Step 1: Understand the routes in
Direct investment. You subscribe for new shares in an EIS-qualifying company raising funds. Deal flow comes from equity crowdfunding platforms, angel networks and syndicates, professional introductions, or companies raising directly. Direct investment gives you full control over what you own — and full responsibility for the due diligence.
The portfolio approach. Because early-stage companies fail frequently, experienced EIS investors rarely back a single company. A typical EIS portfolio spreads capital across eight, ten or more companies over several years, on the logic that the tax reliefs cushion the failures while a small number of successes drive the return. You can build a portfolio yourself through repeated direct investments, or use discretionary services that construct one for you — noting that any managed route adds fees which sit outside the tax reliefs.
Whichever route, one principle holds: the investment must make sense *before* tax relief. HMRC's risk-to-capital condition exists precisely to exclude schemes engineered around the reliefs — and an investment that only works because of the 30% is not working.
Step 2: Check the company qualifies
The reliefs depend entirely on the company's EIS status. Before committing, the essential checks:
Advance assurance. Most credible companies raising under EIS obtain advance assurance — HMRC's provisional confirmation that the company appears to qualify. It is not a guarantee, and it says nothing about investment quality, but its absence from a company marketing itself as "EIS-eligible" is a red flag. Ask to see the advance assurance letter.
Qualifying trade and size. The company must carry on a qualifying trade, be unquoted, have gross assets under £15 million before the raise, fewer than 250 full-time employees (500 for knowledge-intensive companies), and generally be raising within seven years of its first commercial sale (ten for KICs).
Your own connection. You cannot claim relief if you are connected to the company — broadly, holding over 30% of shares or votes, or being a paid employee or director (limited exceptions exist for unpaid or subsequently appointed "business angel" directors). Check this before subscribing, not after.
Step 3: Subscribe for the shares
EIS relief only attaches to new ordinary shares subscribed for in cash. Buying existing shares from another investor does not qualify — ever. The shares must be full-risk: no preferential rights to assets on winding up, no arrangements protecting your capital.
The subscription itself is administratively simple: application form or platform checkout, funds transferred, shares issued. Keep every document — the share certificate, the subscription agreement, proof of payment. The paper trail matters when you claim, and again years later at exit.
Step 4: Claim the relief
After the shares are issued and the company has traded for the required period, the company obtains compliance certification from HMRC and issues you a form EIS3. This is the document that unlocks everything — you cannot claim without it, and it can take months to arrive after your investment.
With the EIS3 in hand, claim your 30% income tax relief through your Self Assessment return. If you want the benefit sooner, HMRC can adjust your PAYE tax code in-year. And remember EIS carry back: you can treat some or all of the investment as made in the previous tax year, using the prior year's allowance and recovering tax already paid — particularly useful in years when your income (and tax bill) was higher.
The other reliefs — CGT disposal exemption after three years, CGT deferral on gains you reinvest, loss relief if things go wrong — are covered in detail in our What is EIS? and EIS loss relief guides.
Step 5: Hold, monitor, and keep the discipline
The three-year holding period is a cliff edge: dispose early, or let your connection status change, and HMRC claws back the income tax relief. In practice most EIS holdings run far longer than three years — five to ten is normal — because unquoted shares only convert to cash at an exit event. Illiquidity is not a bug of EIS investing; it is the nature of it.
During the hold, monitor that the company retains qualifying status (a company can lose it — through acquisition by a larger group, for instance, or a change of activity), and file each year's EIS3 claims promptly. Reliefs unclaimed after the statutory window are gone.
Where EIS investment opportunities come from
There is no central register of live EIS investment opportunities. In practice, deal flow reaches investors through equity crowdfunding platforms, angel syndicates and networks, accountants and professional advisers, and direct approaches from companies raising. Each channel has different levels of vetting — and none of that vetting substitutes for your own judgement on the business. Our research alerts flag EIS-qualifying companies and sectors we are analysing, for registered investors.