The Autumn Budget revealed significant changes in the areas of Entrepreneurial Taxes (ENTT).

At Johnston Carmichael our ENTT team is split into two key areas in order to give the best possible advice and support to our clients. We cover support for Venture Capital Schemes (EIS/SEIS), advising growing businesses on their qualifying status for such schemes. We also support with Share Schemes/Employee Share Incentives, which again can be a key area for fast growing businesses who are looking to retain talent across their business.

It is these areas that have seen notable changes being announced, and it’s for the better. There is recognition that existing tax schemes (EMI, SEIS, EIS, and VCTs) have played a vital role in fostering a dynamic start-up ecosystem in the UK. These schemes have been in place for several decades, and they have been refined and expand over time. The latest changes build on this foundation, making the schemes more accessible and effective for innovative businesses as they seek to scale and grow.  The UK has historically struggled to scale businesses compared to international competitors, and targeted intervention may help address this gap.

Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT)

The company investment limits for EIS have remained unchanged for over seven years, and for VCTs for more than two decades. During this time, the UK’s economic and business landscape has evolved significantly.

To address this, the investment limits and the gross assets test for both EIS and VCT schemes are being doubled. This is a welcome change and will enable business to access follow-up funding beyond the old limits and qualify for beneficial tax reliefs.

From April 2026 the following changes will take effect:

• Annual company investment limit will double to £10 million (£20 million for Knowledge Intensive Companies (KICs)).
• Lifetime company limit will increase to £24 million (£40 million for KICs).
• Gross asset test will increase from £15 million (before the share issue), £16million (after the share issue) to £30 million (before) and £35 million (after).

One negative within the changes is that VCT upfront income tax relief will decrease from 30% to 20%. For EIS this income tax relief remains at 30%.

The Government’s figures suggest that the EIS and VCT increases will support around £100 million per year of extra investment into the most successful UK scaling companies, supporting their further growth and development.

Enterprise Management Incentives (EMI)

EMI company eligibility will also be significantly broadened, aiming to enhance access to talent support for scaling businesses and enable them to offer more competitive remuneration packages. These reforms are expected to benefit around 1,800 high-growth scale-up companies over the next five years, helping them reward an estimated 70,000 employees.

For eligible companies, the changes that will apply to EMI contracts granted on or after 6 April 2026 are as follows:

• The total value of shares under all unexercised EMI options at any time will be double from £3 million to £6 million.
• The requirement that the gross assets of the company must not exceed £30 million will be quadrupled to £120 million.
• The requirement that the number of employees at the time of grant must be fewer than 250 will double to 500 employees.

For eligible companies, a further change will apply to EMI contracts granted on or after 6 April 2026. This change can also apply retrospectively to existing EMI contracts which have not already expired or been exercised.

• The limit on the exercise period will be increased from 10 years to 15 years, thus giving companies a longer period to achieve a planned exit, if the scheme is structured this way.
• It is important to note that existing contracts can be amended without losing the tax advantages the schemes offer, provided it is in line with the legislation. Careful consideration of the discretion rules will be needed to ensure compliance.

Another welcome change for many advisers and businesses is that the EMI notification requirement will also be removed from April 2027. This will be legislated in Finance Bill 2026-27. In recent times the Government moved from a 92-day period for the EMI notification to 6 July following the end of the tax year, but have now decided to remove this step altogether.

The price to be paid (i.e. potentially losing EMI status) was heavy for missing the submission deadline for the EMI notification so we are glad to see this additional step being removed and assume that reporting will now form part of the annual return process.

Get in touch

If you have any queries or we can support you with any of the areas discussed in this blog, please get in touch with me at stephen.oates@jcca.co.uk, your usual JC contact, or another member of our Entrepreneurial Taxes team.