Britain is stepping up its support for entrepreneurs with a sweeping package of tax reforms designed to unlock around £100 million in new private investment every year.

From 6 April 2026, at the start of the new tax year, the government has rolled out a series of changes aimed at helping start-ups and scale-ups access funding, attract talent, and grow faster. The reforms expand key tax relief schemes and form part of a broader push to strengthen the UK’s position as a global innovation hub.

At the centre of the package are major upgrades to three flagship programmes: the Enterprise Management Incentives (EMI) scheme, the Enterprise Investment Scheme (EIS), and Venture Capital Trusts (VCTs). Together, they are intended to channel more capital into high-growth businesses, particularly those in sectors such as fintech, artificial intelligence, and life sciences.

Chancellor Rachel Reeves described the reforms as part of a more “active state” approach to supporting industry. She said the government is unlocking new investment so that founders can access the finance they need to scale their businesses.

One of the most significant changes is the expansion of the EMI scheme, widely regarded as one of the most competitive employee share option programmes globally. The threshold for company eligibility has been dramatically increased, with the gross assets limit rising from £30 million to £120 million. At the same time, the maximum number of employees has doubled from 250 to 500, and the share option limit has increased from £3 million to £6 million.

These changes are expected to benefit around 1,800 fast-growing companies over the next five years, enabling them to offer equity incentives to roughly 70,000 employees — a crucial tool in attracting skilled workers in competitive sectors.

Meanwhile, the government has doubled the lifetime investment limit under both EIS and VCT schemes to £24 million per company. Annual investment limits will also rise to £10 million, with expanded eligibility thresholds based on company assets. The aim is to encourage investors to back earlier-stage, higher-risk businesses that often struggle to secure traditional financing.

However, in a move to rebalance incentives, income tax relief for VCT investors will be reduced from 30% to 20%. Officials say this will push funds to focus more on long-term returns and high-growth opportunities rather than upfront tax advantages.

The reforms are part of a wider package of measures designed to improve the UK’s capital markets and support business growth. These include a new “UK Listings Relief,” which offers a three-year exemption from Stamp Duty Reserve Tax for companies choosing to list on UK exchanges — an international first aimed at making London more attractive for IPOs.

In parallel, the British Business Bank has unveiled a new five-year strategy backed by £25.6 billion in financial capacity. The bank plans to invest at least £5 billion into growth-stage companies and venture funds, while also exploring new ways to support lending backed by intellectual property.

Added context: UK innovation policy

These reforms reflect a broader shift in the UK’s innovation policy — one that combines tax incentives, public investment, and regulatory changes to build a more competitive ecosystem for high-growth companies.

Key pillars of the UK’s innovation strategy now include:

- Pro-investment tax policy: Schemes like EMI, EIS, and VCT remain central tools for attracting both domestic and international investors into early-stage companies.

- Scale-up support: Beyond start-ups, the government is increasingly focused on helping companies scale — bridging the gap between early funding and public markets.

- Capital market reform: Measures like UK Listings Relief aim to reverse the trend of companies listing abroad, particularly in the US.

- State-backed financing: Through institutions like the British Business Bank, the government is taking a more direct role in crowding in private investment.

- Sector focus: There is a clear emphasis on strategic industries such as AI, clean energy, and life sciences — areas seen as critical for long-term economic growth.

In addition, the government has been consulting founders and investors on how to further refine tax policy to better support innovation. A formal response to that consultation is expected later in 2026.

Bottom line

The new package signals a more interventionist approach to economic growth, with the UK government actively shaping the funding environment for innovation. By expanding tax reliefs and increasing access to capital, policymakers hope to make Britain one of the most attractive places in the world to start and scale a business.

Stakeholder responses:

Carolyn Dawson, CEO at Founders Forum Group, said: “The UK has always been a brilliant place to start a company and today’s reforms are a positive step towards making it just as compelling a place to scale. We’re particularly pleased to see the expansion of the EMI scheme: giving more employees a genuine stake in the companies they’re building is one of the most powerful ways to attract talent and reward the risk-takers who drive British innovation forward.

But keeping Britain’s best companies at home requires an ongoing commitment from all of us to back British success stories. When British innovation thrives, it translates directly into better jobs, higher wages, and a more resilient economy for everyone”.

Eva Barboni, Executive Director of Enterprise Britain, said: “Britain needs more companies to make the leap from start-up to scale-up to global champion. These measures speak directly to two of the three pillars we set out as urgent priorities in our most recent report: access to capital and the ability to attract and retain talent. 

The changes to the EMI scheme are particularly important. Talent is the lifeblood of high-growth firms, and widening access to share ownership will help more British scale-ups attract and retain the people they need to compete globally. It will also help ensure that the benefits of those companies’ success are shared more widely”.

Dom Hallas, Executive Director, Startup Coalition:  “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. The improvements to EIS will also help unlock more capital into early-stage businesses, particularly in knowledge-intensive sectors where the UK has real comparative advantage. We are optimistic that next year we will see further improvements to the tax landscape for founders, following the ongoing call for evidence”.

Irene Graham OBE, CEO at ScaleUp Institute, said: “It is very good to see the commitments made in the Budget now being fully enacted. The changes now in effect for EIS / VCT / EMI make a tangible difference to businesses scaling across sectors and geographies as they progress their global growth ambitions. The long-term increased capacity of the British Business Bank and practical solutions that are now deployed such as the British Growth Partnership Fund, alongside Venture Link, are vital enablers, working with the private sector, to build and increase critical scaleup investment into our innovative scaling firms across the country. These packages, alongside the Government’s listing relief; further review of tax policy to support investment in high-growth UK companies and focus on how to evolve IP lending, are clear signals to encourage businesses to start, scale and stay in the UK”.

Hannah Seal, Partner at Index Ventures, said: "The UK now has the most competitive stock option scheme of any large economy in the world. By doubling the headcount cap and quadrupling the asset threshold for EMI, the Government has created a world-leading scheme that surpasses its global peers. This is a game-changer for British entrepreneurship, allowing UK startups to compete with global giants for the best talent. We are grateful to the founders who joined us to advocate for this change and to the Government for taking decisive action to make the UK the best place for top talent”.

Elaine Stroud, Chief Executive, Entrepreneurs Forum, said: "It’s encouraging to see real practical support which will help ambitious businesses to scale. Access to funding remains one of the biggest barriers to growth, and these measures should make it easier for entrepreneurs to unlock that next stage”.