How Long Does EIS Advance Assurance Last?

Introduction

Understanding how long EIS advance assurance remains reliable is crucial for UK startups. Advance assurance is HMRC’s non‑binding opinion that a planned share issue should meet the Enterprise Investment Scheme (EIS) rules.

There is no formal expiry, but investors expect it to be recent and relevant. Founders often ask variations of the same question: “How long does advance assurance EIS last?” or “Does EIS advance assurance expire?”. The answers depend on HMRC’s rules and investors’ expectations. This guide explains the difference between statutory rules and market practice, details when your assurance might become out‑of‑date, and shows how to stay investor‑ready.

What Is EIS Advance Assurance and Why Does It Matter?

EIS advance assurance is HMRC’s provisional opinion that a planned share issue should qualify for EIS tax relief. When a company applies, it submits details about its trade, business model, planned investment terms and eligibility. HMRC reviews the submission and issues an EIS advance assurance letter if the information suggests the investment meets the rules. The letter is based strictly on the facts provided. HMRC states in its own guidance that the assurance is an opinion, not a guarantee, and applies only to the specific share issue described. If terms change or information is incomplete, HMRC will not be bound by the original view.

Founders often ask how long advanced assurance EIS is relevant, because, unlike many assume, there is no statutory EIS advance assurance expiry. What matters is accuracy. As long as the company remains aligned with the version of itself presented in the application, the assurance remains reliable. If key details shift, the company may need to renew EIS advance assurance through a fresh submission.

Although not legally required, EIS advance assurance matters because investors rarely commit without it. EIS relief is attractive: individuals can claim up to 30% income tax relief and may defer capital gains tax. A current assurance letter increases investor confidence in EIS assurance, signalling that the company has considered eligibility carefully and that HMRC has reviewed the proposed terms. Without assurance, founders often experience delays during investor due diligence, especially when raising funds rather than from individual angels.

A few small factors make advance assurance particularly valuable:

• It shows that the trade, cap table and use of funds appear compliant at the time of submission.
• It reduces the risk of structural mistakes that might block relief later.
• It reassures investors that the deal aligns with the expectations set out in HMRC EIS guidance.

Founders benefit from securing assurance early, before term sheets are finalised. If issues appear, for example, an ineligible activity or a problematic share structure, they can fix them before the round opens. This protects both the fundraising timeline and the eventual ability to claim relief.

For a deeper explanation of the mechanics behind the process, see our guide to the SEIS EIS approval process, which explains why advance assurance should be obtained before raising funds and how each stage affects the EIS advance assurance timeline.

How Long Does EIS Advance Assurance Remain Valid?

EIS advance assurance does not have a fixed legal expiry date. HMRC issues it as an opinion, not a guarantee, so it lasts only while your company’s circumstances remain the same as in the original application. That said, investors usually expect an assurance letter that is less than 6–12 months old, and the assurance becomes outdated if your trade, cap table, investment terms or eligibility change.

No Fixed Legal Expiry Under HMRC Rules

HMRC sets no statutory expiry date for EIS advance assurance. The letter is only an opinion, not a guarantee, and applies only to the specific share issue and information you submitted. If facts change, the assurance stops being reliable.

HMRC is clear:

• If information is incomplete.
• If terms change.
• If circumstances shift before shares are issued, the original assurance is not valid.
  

This is the core nuance behind questions like “how long does EIS advance assurance last?” or “does EIS advance assurance expire?”

There is no printed EIS advance assurance expiry, but its usefulness depends on staying compliant with HMRC EIS guidance.

Statutory time limits also matter:

• EIS: company must be within 7 years of first commercial sale (10 years for KICs).
• SEIS: must be within 3 years of trading.

If a company crosses these thresholds, its EIS advance assurance validity becomes an issue because it may no longer meet the scheme rules, even without an official expiry date. In these cases, founders often need to renew EIS advance assurance or begin an HMRC EIS reapplication.

Typical Validity Period in Practice (Investor Perspective)

While HMRC imposes no formal expiry, market practice introduces an informal validity period. Investors, particularly venture capital funds, often expect to see an assurance letter issued within the last six to twelve months. SeedLegals notes that investors sometimes ask founders to reapply for assurance if the existing letter is more than a year old. This is because investor due diligence teams want assurance that the company’s circumstances remain unchanged and that the letter reflects current legislation. Older letters may signal that the business has drifted from its original plans or that scheme rules have evolved.

The typical investment timeline further explains why investors seek recent assurance. It can take several months to prepare a funding round: developing a pitch deck, negotiating term sheets and completing documentation. If the assurance letter predates this process by more than a year, investors worry that the company may have pivoted or issued additional share classes.

To keep the momentum, most founders apply for assurance one to two months before launching a round. This ensures the letter is fresh when presented to investors and avoids delays caused by reapplication.

When Assurance Becomes “Out of Date”

Even without a fixed expiry date, several triggers can render EIS advance assurance unreliable. Founders should review their situation and consider reapplying if any of the following occur:

1. Change in business model or trade activity – A pivot to a different trade may mean the company no longer carries on a qualifying activity. HMRC will not be bound by the original assurance if the company pursues an excluded activity or stops trading. For example, moving from software development to property development could disqualify the company under EIS rules.
   
2. Major cap‑table adjustments – Issuing new share classes, bringing in non‑qualifying investors or restructuring the share capital can affect eligibility. The HMRC manual highlights that assurance applies to the specific share issue described in the application; issuing shares on materially different terms requires a new opinion.
3. Material lapse of time – Investor confidence diminishes as time passes. If your assurance letter is over 12 months old, many VC funds will ask you to reapply. Even if there have been no changes, a long gap signals that the company may have evolved, raising doubts about its EIS advance assurance timeline.
4. Legislative or policy changes – HMRC may update its guidance or the law may change, rendering earlier opinions obsolete. Staying informed about compliance updates is essential; an old letter may not reflect the latest rules.
5. Trading time limits – As noted above, companies must issue EIS shares within seven years of their first commercial sale (ten years for knowledge‑intensive companies). Crossing these thresholds can make the advance assurance invalid.

In addition to the triggers above, founders should watch for regulatory and compliance updates. HMRC periodically revises its manuals, and legislation may change, so an old letter may not capture the latest rules. Scheduling regular advance assurance renewal ensures that your documentation reflects current law and maintains investor trust.

By watching for these triggers, founders can proactively decide when to reapply. A regular compliance review ensures that your assurance remains relevant to investors and HMRC.

How to Check Whether Your EIS Advance Assurance Is Still Valid

Knowing whether your assurance is still credible requires two steps: examining the letter and reviewing your company’s current status. Because there is no expiry stamp, you must interpret the letter date in the context of investor expectations and HMRC rules.

Review the Date on the HMRC Letter

The first check is straightforward: look at the issue date on your assurance letter. While there is no statutory expiry, investors generally expect the letter to be recent,  ideally within the last six months and certainly no older than a year. Investors, particularly venture funds, may ask you to renew EIS advance assurance if the existing letter is more than a year old. If you plan to raise funds soon and your assurance was issued a year ago, it’s prudent to submit a new application before approaching investors.

When examining the letter, verify that the share issue described matches your upcoming round. The assurance applies only to the specific terms you provided. If you intend to raise on different terms, for example, a different share class or valuation cap, the letter may no longer apply. In such cases, reapplying ensures that HMRC’s opinion covers the actual investment.

Verify Your Company’s Current Compliance

The second step is to review whether your company still meets EIS criteria. HMRC will withdraw or ignore assurance if your circumstances change. Consider the following checklist:

• Trade activity – Confirm that you are still carrying on a qualifying trade and that none of your activities fall into excluded categories. The SEIS/EIS pre‑funding checklist provided in our eligibility guide outlines industries that are not eligible and how to check your trade status.
• Use of funds – Ensure that the capital raised will be used for a qualifying business purpose within two years and not for acquiring existing businesses. This information forms part of your initial assurance application and must remain accurate.
• Cap table and investor terms – Review share classes, voting rights and investor protections. Significant changes, such as issuing preference shares with preferential rights, may violate EIS rules. Compare your planned term sheet to the documents submitted to HMRC.
• Continuity of qualifying business purpose – If you pivot or expand into new activities, evaluate whether the new trade qualifies. As the HMRC manual warns, changes in trade or ownership may invalidate assurance.

Conducting this internal audit before fundraising helps you catch issues early. If in doubt, speak with legal and tax advisers or use a platform like Undo Capital, which offers automated compliance checks.

Consult HMRC or Reapply Through Undo Capital

If you determine that your assurance may no longer be reliable,  due to time lapse, structural changes or investor demands, the safest course is to reapply. HMRC accepts multiple applications, and there is no penalty for renewing your assurance. Because processing can take several weeks, it’s wise to submit a new application one to two months before your planned funding round.

Undo Capital’s platform streamlines this process by storing your previous submission, tracking key dates and automatically generating updated documentation. Instead of manually collating documents for each HMRC EIS reapplication, the service automates the process so you remain compliant without administrative burden.

Reapplication also serves as a compliance checkpoint. You must disclose any new information to HMRC, which ensures that your assurance reflects your current business model and share terms. Transparent communication reduces the risk of relief being denied later because of undisclosed changes.

Does EIS Advance Assurance Cover SEIS or Vice Versa?

Short answer: no. SEIS and EIS are separate schemes, and advance assurance for one does not automatically cover the other. That’s why questions like “does advanced SEIS assurance mean EIS as well?” or “does SEIS advance assurance also cover EIS?” are so common.

SEIS is for very early-stage companies. It offers 50% income tax relief on investments up to £200,000 and applies where the company has been trading for under three years. EIS targets slightly later-stage businesses and allows companies to raise up to £5 million per year and £12 million in total (or £10 million per year and £20 million overall for knowledge-intensive companies), with a trading age limit of seven or ten years.

Key points to keep straight:

• Separate applications – you must apply for SEIS advance assurance and EIS advance assurance separately, even if you run a combined or mixed round.
• Different limits and timelines – SEIS and EIS have different age limits, funding caps and conditions, which sit within the wider SEIS/EIS approval process.

In a mixed round, founders often secure SEIS advance assurance for the SEIS tranche first, then apply for both SEIS and EIS in a clearly structured submission, making sure each share issue is documented and justified on its own terms for HMRC and investors.

When to Renew or Reapply for EIS Advance Assurance?

Knowing when to renew your assurance can save time and preserve investor confidence. We outline three scenarios where renewal is advisable.

Reapply After Major Structural or Operational Changes

If your company undergoes significant structural or operational changes, you should reapply. Examples include:

• New trade or pivot – Starting a new line of business or changing your business model may alter your eligibility. Because HMRC’s opinion is based on the trade described in your application, a pivot may render the assurance invalid.
• Share restructure – Introducing a new class of shares with preferential rights, issuing convertible instruments or entering into an advanced subscription agreement (ASA) with a long stop beyond six months may change the terms of investment. HMRC guidance on ASAs expects long stops of no more than six months for EIS compliance. A restructuring may therefore require a fresh opinion.
• Subsidiary formation or group changes – Forming subsidiaries, merging with another company or altering group ownership may mean the group no longer carries on a qualifying trade. The assurance letter will not cover such changes.

Reapply if More Than 12 Months Have Passed Without Funding

Time is a powerful factor. As noted earlier, investors generally regard assurance letters older than a year as out‑of‑date. While angel investors might be more flexible, aligning with investor expectations improves your chances of closing the round. An outdated letter suggests the company has not raised funds as planned or that the fundraising timeline has slipped, which could erode confidence.

Reapplying after twelve months signals to investors that you are proactive and serious about compliance. It also allows you to incorporate any regulatory updates or changes in your business into a new opinion. For example, if HMRC revises the list of excluded trades or updates EIS rules, a fresh assurance ensures that your application reflects current guidance.

Align Assurance Renewal With Upcoming Fundraising

Timing your reapplication is crucial. HMRC processing times range from 15 to 45 working days, so submitting your renewal one to two months before you open a round ensures you have a valid letter when investors review your materials. If you apply too early and then wait six months to start fundraising, your letter may be considered stale. Conversely, applying too late may delay your round. Planning the renewal around your startup fundraising timeline keeps momentum and helps you avoid last‑minute panic.

Common Misconceptions About EIS Advance Assurance Duration

Even experienced founders and investors sometimes misinterpret the rules. Clarifying these misconceptions helps you avoid pitfalls.

“HMRC Letters Expire Automatically” - False

There is no built‑in expiry date for HMRC assurance letters. HMRC offers a non‑binding opinion based on the facts presented. The letter remains valid until circumstances change or the company no longer meets the criteria. Thinking that a letter automatically expires can lead to unnecessary reapplications, while ignoring changes can make the assurance worthless. A balanced approach is to monitor changes and reapply when needed.

“Assurance Guarantees EIS Relief” - False

Advance assurance is not a legal guarantee. HMRC emphasises that it will not be bound by its opinion if the company’s circumstances change or if it discovers that information was incomplete or misleading. Relief is formally granted only after the investment, when the company submits Form EIS1 and receives EIS3 certificates for investors. Treating the assurance as a promise can result in costly disputes if HMRC later denies relief. Always ensure that your post‑investment compliance matches the assumptions in your assurance application.

“One Letter Covers All Future Rounds” - False

Each advance assurance letter applies to the specific share issue described in the application. If you plan multiple rounds, you must provide details of each issue or submit separate applications. Ross Martin’s tax guidance notes that the assurance relates to a particular investment and will not apply if there are material changes; a revised application should be made. An assurance granted for one round does not automatically cover future rounds. Avoid assuming that an old letter will suffice for a new share issue.

How Undo Capital Helps Manage EIS Advance Assurance Timelines

Managing assurance renewals manually can be time‑consuming and error‑prone. Undo Capital offers automation tailored to founders who need to track and renew SEIS/EIS advance assurances. The platform stores your previous applications, monitors key dates, and sends reminders before the 12‑month mark so you can renew EIS advance assurance proactively. It also provides a compliance dashboard that highlights any changes in your business that might affect eligibility, for example, new share classes or shifts in trade.

Undo Capital further simplifies reapplication by generating updated documentation based on your original submission. Instead of duplicating work, you can edit only the sections that have changed and submit a revised application directly to HMRC. The tool also integrates with your cap table and due diligence documents, producing a single source of truth. To explore how automation can streamline your assurance timeline and reduce administrative burden, visit the Undo Capital homepage.

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