UK Expands EMI, EIS and VCT Tax Relief Schemes for Startups and Scale-ups

7 April 2026

The UK government has expanded three entrepreneurship tax relief schemes effective 6 April 2026. The changes, introduced by Chancellor Rachel Reeves at Budget 2025, are expected to unlock around £100 million of additional private investment per year.

Enterprise Management Incentives

The gross assets test for EMI eligibility has been quadrupled from £30 million to £120 million. The employee limit has been doubled from 250 to 500, and the company share option limit doubled from £3 million to £6 million. The expansion is expected to support around 1,800 high-growth scale-up companies across fintech, life sciences and AI over the next five years, covering an estimated 70,000 employees.

Enterprise Investment Scheme and Venture Capital Trusts

The EIS and VCT lifetime company investment limits have doubled to £24 million. Annual company investment limits have increased to £10 million. The gross assets test has increased to £30 million before share issue and £35 million after. Income Tax relief for VCT investors has been reduced from 30% to 20% to better align upfront relief with EIS and to direct capital toward higher-growth companies.

UK Listings Relief

A three-year exemption from Stamp Duty Reserve Tax has been introduced for companies listing in the UK. The government describes this as an international first. The measure is intended to support trading volumes and share prices of UK scale-ups proceeding to a public listing.

British Business Bank

The British Business Bank has published a new Five-Year Strategic Plan with a permanent financial capacity of £25.6 billion. The BBB will invest at least £5 billion in growth-stage funds and scale-up companies. The government has asked the BBB to explore using its existing financial guarantee capacity to support IP-backed lending.

Call for Evidence

A Call for Evidence on tax policy support for investment in high-growth UK companies, launched at Budget 2025, closed in February 2026. The government has said it will respond in due course.

Source: https://www.gov.uk/government/news/britains-innovators-backed-with-around-100m-of-new-investment

--

Join Newnex - the exclusive platform for institutional VCs to syndicate, co-invest and follow-on deal-making, privately, directly without intermediaries www.newnex.io