The 2026/27 tax year arrived on 6 April, bringing the most significant changes to EIS and VCT investment in nearly a decade. Here is what has changed.
Companies raising EIS and VCT money
The Finance Act 2026 enables companies to raise larger amounts from VCTs and EIS investors.
Effective for shares issued on or after 6 April 2026:
- The gross assets limit has moved from £15m (before issue) and £16m (after issue) to £30m and £35m respectively
- The annual fundraising limit has moved from £5m to £10m for standard companies, and from £10m to £20m for knowledge-intensive companies
- The lifetime limit has moved from £12m to £24m for standard companies, and from £20m to £40m for knowledge-intensive companies
We welcome the increased limits which will help qualifying companies looking to scale up, as well as start-up companies.
Tax Reliefs for Investors
EIS
Income tax relief remains at 30%, and the annual investor limit stays at £1 million (£2 million where the excess is invested in knowledge-intensive companies).
VCT
For shares issued by a VCT on or after 6 April 2026:
- Income tax relief has dropped from 30% to 20%
- The annual investor allowance of £200,000 is unchanged
- On a full £200,000 subscription, maximum relief is now £40,000, down from £60,000
- The CGT exemption on disposal and dividend income tax exemption are both unchanged
We understand VCTs raised £917 million in the 2025/26 year, which will now be invested in the UK growth companies. The reduction in the tax relief is likely to mean that less money will be invested in VCTs in the future.
SEIS
No changes. The scheme aimed most directly at the earliest-stage companies remains exactly as it was.
A note on scope
The increased limits do not apply universally. Companies engaged in certain activities, including some Northern Ireland operations and businesses involved in the generation or transmission of electricity or specified goods trading, remain subject to the previous limits. If you are unsure whether your company falls within the expanded thresholds, take advice before relying on them. HMRC has also updated the EIS1 form to reflect the new limits – if you are in the process of applying, make sure you are using the current version.
Come and talk to us
If you want to understand what the new rules mean for your company or your investment plans, we are happy to help. You can contact us here.
