EIS Income Tax Relief

📘 Overview


This guide explains how to claim Income Tax relief under the Enterprise Investment Scheme (EIS) once you have received an EIS3 compliance certificate. It covers both methods of claiming, what information HMRC requires, and key points to consider before submitting a claim.

🔍 What this article covers

  • How to claim EIS relief through your tax return
  • How to claim using the EIS3 compliance certificate
  • Information required for each investment
  • Special rules (joint ownership, previous-year claims, and KIC limits)
  • Key practical points and HMRC follow-up steps

📘 Understanding the EIS3 certificate

Your EIS3 confirms that the company has met HMRC’s EIS requirements and that you are eligible to claim relief on qualifying shares. You cannot claim Income Tax relief until the EIS3 has been issued.

Your EIS3 will also state whether the company is a knowledge-intensive company (KIC), which affects the maximum relief you can claim.

📘 How to Claim the Relief

There are two ways to claim EIS Income Tax relief:

  1. Through your Self Assessment tax return
  2. Through the EIS3 compliance certificate claim form

You can use whichever method suits your situation best.

📘 Claiming Through Your Self Assessment Tax Return

Where to enter the claim

On page Ai 2 of the Additional Information pages:

  • Enter in box 2 (Other tax reliefs) the total amount of your subscriptions for which you are now claiming relief.

Include:

  • Any amount where you received relief through an adjustment to your PAYE code, or
  • A reduction in a payment on account.

Exclude:

  • Any amount where you are claiming relief for a previous tax year, not the current year.

Maximum allowable amounts

The maximum annual investment on which you can claim relief is £2 million, provided that:

  • Only £1 million can be for any EIS-qualifying company, and
  • Anything over £1 million must be for shares issued by knowledge-intensive companies (KICs).

Your EIS3 confirms whether the company was classified as a KIC when the shares were issued.

📊 Details you must include in “Any other information” (Box 19)

HMRC requires the following information for each investment. Enter these in the ‘Any other information’ box (box 19 on page TR 7):

  • Unique Investment Reference (UIR) from the EIS3
  • Company name you invested in
  • Amount on which you are claiming relief for this year

  • Date the shares were issued

    If your total subscriptions exceed £1 million (or £2 million where the excess is in KICs): how you want the relief to be allocated across investments

    • (See section How much relief you get below for guidance.)

List all subscriptions for which you are claiming relief, even if you had to reduce the amount entered in box 2 to avoid exceeding the annual maximum.

HMRC may ask to see the original EIS3, so keep it safe.

📘 If you have not yet received an EIS3

You cannot claim relief for an investment in shares issued during the year until you have received the EIS3 for that investment.

If the EIS3 arrives after you have submitted your tax return:

  • Complete the claim form included with the EIS3, and
  • Post it to HMRC separately.

📘 Claiming Through the EIS3 Compliance Certificate Claim Form

Your EIS3 consists of four pages:

  1. The certificate confirming your investment
  2. Notes on Income Tax relief and capital gains deferral relief
  3. EIS claim form – investment and claim details
  4. EIS claim form – declaration

To submit a claim:

  • Use the information on page 1 to complete pages 3 and 4.
  • Page 2 provides guidance on choosing how much Income Tax and/or capital gains deferral relief to claim.

Completing the declaration

Ensure the declaration includes your:

  • Name
  • Address
  • Signature
  • Date

Post the completed form to:

HMRC, PAYE & Self Assessment, BX9 1AS

Following up with HMRC

If you have not heard back within 30 days:

  • Check HMRC’s current estimated processing times using their online tool (🔗 HMRC processing times).
  • If the expected date has passed, you can contact HMRC using their listed contact methods (🔗 HMRC contact options).

🔍 Things to Consider

Jointly owned shares

Where shares are issued to joint owners, HMRC treats each person as having:

  • Subscribed half the total amount, and
  • Acquired the same number of shares.

For example:

If a married couple subscribes £2,000 for 2,000 shares, each is treated as having subscribed £1,000 for 2,000 shares, even if only one paid for them.

Each joint owner must receive a separate EIS3 from the company to claim relief.

Claiming relief for a different tax year

The general rule is that relief applies to the tax year in which the shares were issued.

However, you may elect to treat some or all of the shares as issued in the previous tax year, if you prefer, subject to the maximum annual limit.

The share issue date is shown on your EIS3.

📊 How much relief you can receive

You can claim Income Tax relief at 30% on the qualifying amount of your subscriptions.

However:

  • You cannot claim relief on more than £2 million in total.
  • Any amount over £1 million must relate to investments in KICs.
  • If your total Income Tax liability is not high enough to absorb all of the relief, the unused amount is lost (you cannot carry it forward).

💡 Key Practical Points (Summary)

  • You must have an EIS3 before claiming relief.
  • Claim through your Self Assessment return or using the EIS3 claim form.
  • Enter claim amounts in box 2 (Ai 2) and provide full details in box 19 (TR 7).
  • Keep your EIS3 certificates safe as HMRC may request them.
  • Relief is capped at £2 million, with KIC rules applying to amounts over £1 million.
  • If HMRC delays beyond 30 days, check their published processing times and follow up as needed.

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