Treasury quadruples the EMI asset limit as scale-up tax reliefs widen
Growing tech companies can keep offering tax-advantaged share options for longer and raise more through investor reliefs. But investors in venture capital trusts now get less upfront relief
- EMI employee limit: up from 250 to 500
- EMI company share option limit: up from £3m to £6m
- EIS and VCT company limits: £24m lifetime and £10m a year
- VCT income tax relief: cut from 30% to 20%
Founders who slowed hiring or rationed option grants to stay inside EMI have room to rethink both. The move to copy is a review of the option plan before the next round, with an adviser testing eligibility against the new limits, because a retention tool that lapses mid-scale-up is expensive to replace. Boards raising from VCTs should be ready for investors who may ask harder questions about growth.
“Expanding EMI is a genuine win for the startup ecosystem - it gives high-growth companies far more room to compete for talent, which is ultimately what drives scaling success.”Dom Hallas, executive director, Startup Coalition
Wider rules for the Enterprise Management Incentives (EMI) share option scheme and the Enterprise Investment Scheme (EIS) took effect on 6 April, the start of the tax year, HM Treasury said on 7 April. It expects the package, first set out at Budget 2025, to support around £100m of extra investment a year.
The EMI change matters most to companies that had outgrown the old rules. Eligible companies can now hold gross assets of up to £120m, four times the previous £30m ceiling, and both the headcount cap and the value of options a company can grant are higher. The government expects around 1,800 high-growth companies, in sectors including fintech, life sciences and AI, to use the wider scheme over the next five years, rewarding an estimated 70,000 employees.
On funding, companies can now raise twice as much over their lifetime through EIS and venture capital trusts (VCTs). The Treasury says trimming VCT relief is meant to push funds toward the highest-growth companies. A call for evidence on tax support for high-growth companies closed in February, and the government says it will respond in due course.
The changes sit alongside the British Business Bank’s five-year strategic plan, under which it will invest at least £5bn in growth-stage funds and scale-up companies.
Sources
- HM Treasury, “Britain’s innovators backed with around £100m of new investment”, press release, 7 April 2026. https://www.gov.uk/government/news/britains-innovators-backed-with-around-100m-of-new-investment
