Autumn Budget 2025
The government has announced significant increases to the existing annual, lifetime and gross assets limits for companies receiving investment under the EIS and VCT schemes. These changes are designed to support early-stage and scaling businesses, whilst the reduction in the income tax relief rate for the VCT scheme maintains, what the government believes to be, a balanced approach to investor tax relief.
EIS and VCT changes for companies
From 6 April 2026, the existing limits for companies receiving investment under EIS or VCT will increase, enabling businesses to access greater funding through these schemes:
- Gross assets before share issue: Up to £30 million (previously £15 million)
- Gross assets after share issue: Up to £35 million (previously £16 million)
- Annual investment limit:
o Standard companies: £10 million (up from £5 million)
o Knowledge-intensive companies: £20 million (up from £10 million) - Lifetime investment limit:
o Standard companies: £24 million (up from £12 million)
o Knowledge-intensive companies: £40 million (up from £20 million)
The increased limits do not apply to companies in Northern Ireland carrying out certain trades.
VCT changes for individuals
From 6 April 2026, VCT Income Tax relief will reduce from 30% to 20% for individuals investing in VCTs.
This change aims to align VCT relief more closely with EIS, which does not offer dividend relief, and encourage funds to focus on supporting high-growth businesses. In reality, it is likely that VCT investment will decrease as a result.
