SEIS, State Aid & De Minimis Rules

SEIS, State Aid & De Minimis Rules: What Founders Must Know to Stay Eligible

When founders think about SEIS, the focus is usually on the headline rules: your company must be under three years old, have fewer than 25 full-time employees, gross assets under £350,000, and raise no more than £250,000 in SEIS funding.



But there’s a quieter set of rules that can trip founders up the State Aid framework, and in particular, the de minimis aid cap. Ignore it, and you could find yourself restricted or even disqualified from raising the full SEIS amount.

Why State Aid Still Matters for SEIS

SEIS is classed as a form of State Aid. That means it doesn’t exist in isolation. HMRC has to check whether your company has already benefited from other State Aid before deciding if your SEIS raise is valid.

This matters because State Aid isn’t just about investment schemes. Grants, subsidies, and other targeted government support can all count towards the total. If you’ve already tapped into these, they eat into the room you’ve got left for SEIS.

The De Minimis Cap Explained

The de minimis cap is a rolling three-year limit of €200,000 on State Aid a company can receive. Yes, it’s still calculated in euros even post-Brexit, because the UK retained this framework in parallel with the newer Subsidy Control rules. HMRC assesses against the euro value at the grant or investment date; in practice, founders just track the nominal figures and let advisors handle FX checks if they’re close to the line.

Note: Since 4 January 2023, the UK also has “Minimal Financial Assistance” (MFA) under the Subsidy Control Act (currently £315,000 over three fiscal years). HMRC has confirmed SEIS remains a legacy de minimis scheme, so MFA awards don’t reduce your SEIS allowance — only de minimis awards do.

SEIS counts toward the €200,000 ceiling. So do many Innovate UK grants, regional development funds, and even some COVID-era support where they were categorised as de minimis aid.

If you’ve already received, say, €50,000 of qualifying grants, your SEIS headroom is reduced by that same amount. Instead of the full £250,000, you might only be able to raise around £210,000.

What About EIS?

EIS sits under a different category of State Aid  it’s “notified aid” under risk finance guidelines. This means the €200,000 de minimis cap doesn’t apply to EIS.

That said, other forms of notified aid can reduce your EIS headroom. For example, a large notified innovation grant could eat into the £5m annual or £12m lifetime EIS limits that run alongside the scheme. So while SEIS is directly constrained by de minimis, EIS interacts with State Aid in other ways.

Common Pitfalls

One of the most common mistakes is taking a large Innovate UK grant and then trying to raise the full SEIS allowance without checking the grant’s aid basis. If the grant was de minimis, it reduces your SEIS headroom pound-for-pound; if it was notified aid or MFA, it may not.

Another trap is assuming EIS automatically solves the problem. While EIS isn’t subject to de minimis, HMRC still expects a full disclosure of all prior aid and will test how other subsidies interact with your EIS limits.

FAQs

Can I still raise SEIS if I’ve had a grant?
Yes, but you need to check the aid basis. If the grant was de minimis, it reduces your SEIS allowance. If it was MFA or notified aid, it may not.

Do I need to disclose all grants to HMRC?
Absolutely. Both at the advance assurance stage and when you file the compliance statement, HMRC expects a full list of prior aid. Omitting this can cause delays or rejections.

Does EIS count towards de minimis aid?
No. EIS is notified aid, not de minimis. That’s one reason it’s often easier to use once SEIS is maxed out.

What happens if I breach the €200,000 cap?
You won’t be able to qualify the full SEIS raise. HMRC will restrict or deny relief for the portion that breaches the limit.

Practical Advice

The safest approach is simple: keep records. Every time your company receives a grant, subsidy, or other support, note the amount, the source, the date, and crucially the aid basis shown on the grant letter (de minimis / MFA / notified). That determines whether it chips away at SEIS.

When you apply for SEIS advance assurance, disclose everything. HMRC will always prefer a clear, transparent application over one that leaves questions unanswered.

If you’re close to the €200,000 cap, you may need to adjust strategy — perhaps splitting between SEIS and EIS, or timing a grant so it falls outside your rolling three-year window.

Why This Matters

For many startups, SEIS is the gateway to their very first round of investment. But HMRC doesn’t just test the SEIS rules in isolation. If you ignore State Aid and de minimis limits, you could disqualify yourself without even realising it.

The good news is that with planning, disclosure, and advice, these issues are manageable. SEIS is still one of the most generous early-stage funding schemes in the world — but you need to respect the fine print.

How We Can Help

At OnTheGo Accountants, we’ve helped founders raise SEIS alongside Innovate UK grants, R&D tax credits, and other forms of State Aid. We know how to map out the funding picture, identify risks, and present it cleanly to HMRC.

If you’re raising under SEIS and already have grant support in the mix, we can help you avoid nasty surprises. Get in touch at info@onthegoaccountants.co.uk.