What is a qualifying trade?

Outlining the trades, activities and subsidiaries that qualify for SEIS and EIS.

One of the first questions you’ll be asked when applying for SEIS/EIS advance assurance is whether your company (and any of its subsidiaries) carries out a ‘qualifying trade.’ 

It sounds a lot scarier than it is, and quite frankly HMRC themselves do say “most trades will qualify, including any research and development which will lead to a qualifying trade.”

However, you’ll want to know if your company meets the qualifying trade criteria before you start the application. 

Fortunately, the list of non-qualifying trades is relatively straightforward, and as long as more than 20% of your business doesn’t include the following, you should be okay: 

  • Coal or steel production
  • Farming or market gardening
  • Leasing activities
  • Legal or financial services
  • Property development
  • Running a hotel
  • Running a nursing home
  • Generation of energy, such as electricity and heat
  • Production of gas or other fuel
  • Exporting electricity
  • Banking, insurance, debt or financing services

For more information, and a full list of non-qualifying trades, read here.

What if my company is part of a group? 

Things get a little trickier with groups, as each company needs to be a ‘qualifying subsidiary.’ 

This means: 

  • Your company must own more than 50% of the subsidiary’s shares 
  • No one other than your company or one of its other qualifying subsidiaries can control this subsidiary
  • There cannot be any arrangements which would put someone else in control of this subsidiary

And of course, the subsidiaries must carry out a qualifying trade. 

If the SEIS/EIS investment is going to be spent on one of your qualifying subsidiaries, the subsidiary must be at least 90% owned by the company. This is also the case if the subsidiary’s main business is property or land management. 

You can also set up a subsidiary to complete a project or series of projects before closing, as long as it supports the growth and development of your company.


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