The 2025 UK Budget introduces measures relevant to investors and growth-oriented businesses. While many headline investment rules remain unchanged, updates cover investment schemes, public market incentives, environmental policies, R&D support and employee ownership structures.
✅ Key Changes Supporting Growth and Capital Raising
Enterprise Investment Scheme (EIS) & Seed Enterprise Investment Scheme (SEIS) Expansion
From April 2026, companies can raise higher levels of capital under EIS and SEIS. The updated limits are as follows:
| Category | Current Rate | New Limit from April 2026 |
| Annual company investment limit | £5 million (£10 million for knowledge-intensive companies) | £10 million (£20 million for knowledge-intensive companies) |
| Lifetime company limit | £12 million (£20 million for knowledge-intensive companies) | £24 million (£40 million for knowledge-intensive companies) |
| Gross assets test | £15 million before share issue; £16 million after share issue | £30 million before share issue; £35 million after share issue |
These changes allow companies, particularly knowledge-intensive firms, to access larger amounts of capital, supporting growth and scale-up ambitions.
VCTs and Tax-Efficient Structures
- EIS retains 30% income tax relief, Capital Gains Tax (CGT) benefits, and Inheritance Tax (IHT) relief.
- VCT income tax relief will be 20% from April 2026, providing a tax-efficient option for investors.
EMI Changes
The EMI scheme is being significantly expanded:
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Gross assets limit rises from £30m → £120m
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Employee limit increases from 250 → 500
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Option limit doubles from £3m → £6m
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Option lifetime extended to 15 years
These updates mean many more scaling and PE-backed companies will now qualify—well beyond a simple inflationary adjustment. EMI remains the gold standard for employee incentives: flexible, tax-efficient, no upfront cost for employees, and gains taxed under CGT, making it a strong tool for attracting and retaining talent.
Public Markets Incentive
- A three-year stamp duty holiday applies to securities of newly listed UK companies, exempting the usual 0.5% Stamp Duty Reserve Tax (SDRT), supporting IPOs and public fundraising.
R&D Tax Credit Applications
- From spring 2026, HMRC will pilot an advance assurance scheme, enabling businesses to confirm key details of R&D tax claims before submission, providing certainty for investors and companies planning R&D projects.
Employee Ownership Trusts (EOTs)
- Tax relief on qualifying disposals to EOTs falls from 100% to 50%, meaning business owners selling shares to an EOT will pay CGT on half the gain.
Sustainable and Green Investment Incentives
- Vehicle Taxes: From 2028, 3p/mile for electric vehicles, 1.5p/mile for hybrids.
- Plastic Packaging Tax: Possible increase or revised exemption threshold.
- Landfill Tax: Planned overhaul cancelled.
- Business Rates Relief: £140 million over the next few years for green energy equipment.
- Air Passenger Duty: Third band for long-haul flights, raising £145 million over two years.
- Flood Defence & Climate Resilience: Additional funding for climate-adapted infrastructure.
- Farming & Environmental Land Management: Increased payments for biodiversity and soil health.
- Nature Restoration: Government to explore tax incentives, green bonds, and public guarantees to encourage private investment.
🧭 Summary
The 2025 Budget introduces expanded EIS, SEIS and VCT limits, stamp duty relief for new listings, environmental measures, R&D advance assurance, and EOT changes. Collectively, these updates provide businesses with clarity and flexibility after several months of uncertainty.
