The Government has announced a series of updates to both the Enterprise Investment Scheme (EIS) and Enterprise Management Incentive (EMI) schemes, set to take effect from April 2026. These changes are designed to enhance the UK’s support for high-growth businesses, particularly in innovation-led sectors, by widening access to funding and talent incentives.

Enterprise Investment Scheme (EIS) updates

The EIS is already a key tool for businesses seeking early-stage investment, and from 2026, the parameters will shift significantly:

• The annual investment limit will double to £10 million, or £20 million for Knowledge-Intensive Companies (KICs).
• The lifetime cap will rise to £24 million (or £40 million for KICs).
• The gross assets test will increase to £30 million pre-investment and £35 million post-investment.

These measures expand the EIS’s scope, allowing companies more runway to raise capital and scale effectively. For investors, the enhanced limits create greater opportunities to support innovative businesses with favourable tax reliefs.

However, there is a notable change to the Venture Capital Trust (VCT) scheme, with income tax relief due to be reduced from 30% to 20%.

Enterprise Management Incentive (EMI) scheme enhancements

The EMI scheme, a cornerstone for growth-stage companies looking to reward and retain talent, will also see substantial changes from April 2026:

• The employee limit will increase from 250 to 500.
• The gross asset threshold will rise from £30 million to £120 million.
• The company-wide share option limit will double to £6 million.
• The maximum holding period for options will be extended from 10 to 15 years.
• The EMI notification requirement to HMRC will be removed from April 2027.

These enhancements follow recent changes under the PISCES initiative, allowing greater flexibility for amending existing EMI or CSOP options. Collectively, the changes increase eligibility, reduce administrative burden, and strengthen EMI’s position as a practical, tax-efficient mechanism to attract and retain key staff.

What this means for businesses

For scaling businesses, these changes present a real opportunity to extend funding capacity and incentivise top talent more effectively. While the VCT relief reduction is a drawback for some investors, the overall direction of travel is a positive one. One we see as encouraging innovation, growth, and long-term investment in the UK’s SME landscape.