What is EIS Income Tax relief?

30% of your investment is deducted from your Income Tax bill. On a £10,000 investment, you get £3,000 tax relief.

What if the company fails?

You can claim loss relief on the amount invested minus any Income Tax relief received.

Can I carry back EIS relief?

Yes, you can carry back relief to the previous tax year, subject to limits.

Investment2026/27

What is Enterprise Investment Scheme? UK Definition 2026/27

Written by Waqas Sagar ACA, FCCA, FMAAT

•

Verified by ICAEW, ACCA & AAT

•Updated April 2026

Quick Answer

Tax relief scheme offering 30% Income Tax relief on investments in qualifying small companies.

Definition of Enterprise Investment Scheme

The Enterprise Investment Scheme (EIS) offers significant tax reliefs to individuals investing in qualifying small, higher-risk companies. Benefits include 30% Income Tax relief, Capital Gains Tax deferral, and CGT exemption on EIS shares held for 3+ years.

Maximum annual investment is £1 million (£2 million if excess is in knowledge-intensive companies). Shares must be held for at least 3 years to retain reliefs.

Enterprise Investment Scheme — Key Facts for 2026/27

Income Tax relief	30% of investment
Annual limit	£1 million (£2m for KICs)
Holding period	Minimum 3 years
CGT on gains	Exempt if held 3+ years

How Enterprise Investment Scheme Works — Example

EIS investment benefits

1Invest £50,000 in EIS-qualifying company
2Income Tax relief: £50,000 × 30% = £15,000
3Defer CGT on previous gains by reinvesting
4If shares sold after 3 years at profit:
5No CGT on the EIS gain
6If company fails: Loss relief available

How Enterprise Investment Scheme Affects Your Tax

EIS can significantly reduce your tax bill but investments are high-risk. Only invest money you can afford to lose. The companies are small and may fail.

Official HMRC Guidance on Enterprise Investment Scheme

For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.

HMRC: EIS guidance

Frequently Asked Questions about Enterprise Investment Scheme

Related Tax Terms

Venture Capital Trust

Quoted fund investing in small companies with 30% income tax relief on investments.

Capital Gains Tax

Tax on profit when you sell or dispose of an asset that has increased in value.

Accuracy Note

This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.