What's Changed: EMI and EIS Reforms from 6 April 2026

_{^{"Chancellor Rachel Reeves prepares to deliver the Budget" by UK Government, licensed under CC BY 4.0. Source}}

The biggest shake-up to the UK's Enterprise Management Incentive (EMI) and Enterprise Investment Scheme (EIS) regimes in over two decades is now live - with the changes announced in the 2025 autumn budget now live from 6th April 2026. Here's what founders need to know.

EIS: Doubled Limits, Bigger Runway

The EIS changes are equally significant for companies raising investment. From today, companies can raise more and remain EIS-eligible for longer.

Annual limits double. Companies can now raise up to £10m per year under EIS (up from £5m), or £20m for Knowledge-Intensive Companies. Lifetime limits also double to £24m and £40m respectively.

Higher gross asset thresholds. The pre-investment gross asset cap rises from £15m to £30m (and £35m post-investment), bringing later-stage companies into scope.

EIS income tax relief stays at 30%. This is notable because VCT relief has dropped from 30% to 20% on the same date. That widening gap is likely to push more investors toward direct EIS investment, which should benefit founders raising rounds.

SEIS: As you were

The Seed Enterprise Investment Scheme (SEIS) received an overhaul quite recently (with total investment growing from £150k to £250k, increasing individual investor limits, age limit from 2 to 3 years, “gross asset” test increase from £200k to £350k and income tax and Capital Gains Tax re-investment reliefs will also increase from £100k to £200k) so the government skipped any additional changes this time.

What founders should do now

If you're approaching a funding round, the expanded limits mean you have materially more headroom to raise EIS-qualifying capital. For companies that had previously hit their lifetime cap, it may now be possible to raise further EIS investment.

The shift in investor incentives away from VCTs toward direct EIS is also worth factoring into your fundraising strategy - particularly around how you position tax reliefs to prospective angels and syndicates.

EMI: More Companies, More Options, More Time

Since its launch in 2000, EMI has been the gold standard for tax-efficient employee share options - but its qualifying thresholds hadn't been updated since 2003. That changes today, 6th April 2026.

Expanded eligibility. The employee limit doubles from 250 to 500 full-time equivalents, and the gross asset threshold quadruples from £30m to £120m. In practice, this brings a significant number of scale-ups back into EMI territory - businesses that had been forced onto the less favourable Company Share Option Plan (CSOP) or unapproved arrangements simply because they'd grown.

Bigger option pools. The company-wide option cap doubles from £3m to £6m, letting qualifying companies grant EMI options to more employees or top up existing grants. The individual limit stays at £250,000 per employee.

Longer exercise windows. The maximum holding period extends from 10 to 15 years. This is a meaningful change. The average time from startup to exit continues to lengthen, and many option holders were watching their grants approach the old 10-year cliff. Critically, this extension can also be applied retrospectively to existing EMI options - though plan documentation will need to be amended.

Less admin - from April 2027. For options granted on or after 6 April 2027 there will be no requirement for companies to submit a separate notification when granting EMI options Instead, HMRC will require the information relating to the grant of options to be included in the EMI end of year returns from 6 April 2028.

What founders should do now

If your company previously outgrew EMI and moved to CSOP or unapproved options, it's worth reassessing eligibility under the new thresholds. Companies in this position may want to consider cancelling existing arrangements and regranting as EMI to recapture the tax advantages.

If you have an existing EMI scheme, review your plan documentation. The 15-year holding period doesn't apply automatically to existing options; you'll need to amend the relevant agreements.

The Bigger Picture

Both sets of reforms signal a clear government intent: keep high-growth companies scaling in the UK by making the tax-advantaged toolkit more accessible and more generous. For founders, the practical impact is straightforward: more room to incentivise your team through EMI, and more capacity to raise tax-efficient investment through EIS.