Money That Doesn't Cost You Equity

When runway gets short, most founders think about two levers: cut costs, or raise a round. There's a third one that gets ignored far more than it should, which is the set of UK schemes designed to put money back into early-stage companies without anyone taking shares off you.

Some of it is cash straight from HMRC. Some of it works by making your company a much easier thing for an investor to say yes to. None of it is free money — there's paperwork, and there are rules you can trip over — but if you're burning cash and you haven't looked at any of this, it's worth an afternoon.

Figures below are taken from HMRC guidance and were checked in July 2026. Thresholds move, sometimes at short notice, so check the linked GOV.UK pages before you rely on any number here.

R&D tax relief: the one most people leave on the table

The single biggest misconception here is that "R&D" means people in lab coats. It doesn't. HMRC's test is about resolving genuine technical uncertainty — problems where a competent professional in the field couldn't just look up the answer.

Plenty of ordinary software work clears that bar. Getting a system to hold up under a load nobody had built for, making two things talk to each other when the documented approach doesn't work, building something where you genuinely didn't know at the outset whether it was possible. What doesn't count is the routine stuff: another CRUD screen, a redesign, wiring up a well-documented API exactly as the docs describe.

Which scheme applies depends on your accounting period. For periods beginning on or after 1 April 2024 the old SME and RDEC schemes were merged, and there are now two routes:

A pre-revenue technical startup, burning cash, with most of its spend going on engineers, is close to the profile ERIS was written for. If that's you and you've never looked at it, that's the one to ask about.

Two practical things. First, there's a cap: your credit can't exceed £20,000 plus 300% of your PAYE and National Insurance bill for the period, unless you're exempt. If you're a two-founder company paying yourselves very little and spending most of your money on contractors, that cap can bite harder than you'd expect. Second, you often have to notify HMRC in advance that you intend to claim. Miss that window and the claim can be refused on process alone, regardless of how good it was.

You can also apply for advance assurance on a first claim, which is HMRC telling you up front that they'll accept it. For a first-timer that's worth having.

Source: HMRC — merged scheme and enhanced R&D intensive support

SEIS: making your first raise easier

SEIS doesn't hand your company money. It gives your investors a substantial tax break for backing you, which in practice makes a very early cheque much easier to write. For angel investors in the UK, "is it SEIS-eligible?" is often one of the first questions, and if the answer is no you've quietly made your own raise harder.

The company-side limits are tight, because it's aimed squarely at the beginning:

• A maximum of £250,000 raised through the scheme in total
• Gross assets no more than £350,000 when the shares are issued
• Fewer than 25 full-time equivalent employees
• A new qualifying trade that hasn't been carried on for more than 3 years
• The money spent within 3 years of the share issue

Here's the trap, and it's an expensive one. You cannot use SEIS if you've already taken investment through EIS or a Venture Capital Trust. The order is one-way. Take EIS money first and the SEIS door closes permanently — so if you think you'll use both, SEIS has to come first.

Source: HMRC — apply to use SEIS

EIS: the stage after that

EIS is the bigger sibling, for companies past the seed stage. The limits went up in April 2026, and the current position for most companies is:

• Up to £10 million in any 12-month period across EIS, VCT, SEIS and certain other state aid
• Up to £24 million across the company's lifetime
• Fewer than 250 full-time equivalent employees
• Gross assets no more than £30 million before the shares are issued
• Normally within 7 years of your first commercial sale

That seven-year clock is the one to watch, because it starts at your first commercial sale rather than incorporation — and if you've acquired anything, it's the earliest date across the group. Founders who sold something small and early sometimes find the window is further along than they assumed. There are routes to raise outside it, but they involve proving you're entering a genuinely new market, which is a harder conversation.

Companies doing serious research or innovation may qualify as knowledge-intensive, which relaxes several of these limits. Worth checking if that might be you.

Source: HMRC — apply to use EIS

The risk to capital condition

Both SEIS and EIS carry a condition that catches people out, so it's worth understanding before you build a deck around it. HMRC requires that the investment genuinely puts the investor's capital at risk, and that your company intends to grow — more revenue, more customers, more people.

What this rules out is anything engineered to make the investment safe. Arrangements where one investor gets priority over others, where someone can pull their money out early, or where the structure is clearly built around harvesting the tax relief rather than building a business. HMRC looks at how the opportunity was marketed, not just how it was papered.

And the reliefs aren't locked in at the point of investment. Break the scheme rules within three years and the relief can be withdrawn from your investors, retrospectively. Which is a conversation nobody wants to have with the people who backed them.

Where this fits with your runway

R&D relief is the one that shows up directly in the runway calculation, because it's cash coming back in. But it lands months after the spend, not alongside it, so it's a slow lever rather than an emergency one. Claiming it as a routine part of your year-end — instead of remembering it when things get tight — is the difference between it being useful and it arriving too late to matter.

SEIS and EIS work differently. They don't change your burn at all. What they change is how quickly you can close a round, which affects how much runway you actually need to hold in reserve. If raising takes four months instead of eight, the twelve-month buffer that felt uncomfortably thin starts to look reasonable.

One honest note to finish on. I'm a developer, not an accountant, and the detail here gets complicated quickly — particularly around what expenditure qualifies, subcontractor treatment, and grant interactions that can reduce what you're able to claim. Everything above is a starting point for a conversation with someone qualified, not a substitute for it. An accountant who does startup claims regularly will usually pay for themselves on the first one.