EMI and EIS changes to put a spring in our step

In this blog, Lewis Miles, Policy and Public Affairs Manager at the BioIndustry Association (BIA), discusses changes to Enterprise Management Incentives (EMIs), and the Enterprise Investment Schemes (EISs)/Venture Capital Trusts (VCTs) coming into force. He says they will significantly raise investment, asset and eligibility limits, unlocking around £100 million a year in additional funding and making the schemes more effective for scaling UK life science companies.

Following extensive BIA campaigning, 6 April 2026 was a big day for both the Enterprise Management Incentives (EMI), and the Enterprise Investment Schemes (EIS)/Venture Capital Trusts (VCTs).

Announced in the Autumn Budget, the schemes will undergo various changes – such as significant increases to investment and asset limits – allowing them to support more companies as they scale and grow beyond the previous fundraising limits.

Taken together, these changes are expected to support around £100 million of additional investment a year, and will make the schemes far more suitable, and far more useful, for UK life science companies.

Chancellor of the Exchequer Rachel Reeves said:

I am backing business with a more active state that’s making big commitments to industry. I have taken steps to unlock £100 million a year for new investment in the businesses founded by our wealth creators so they can access the finance critical to their success.

Enterprise Management Incentives (EMI)

EMI allows SMEs to offer employees options to buy shares at a fixed price, aligning incentives with long-term company growth and supporting talent retention.

It is a powerful policy tool for supporting innovative, young and R&D-intensive companies. It helps them compete in a global jobs market for the talent they need to innovate and grow their businesses by offering a more competitive remuneration package that helps them recruit and retain employees.

From April 2026, the employee limit and the company share option limit will both double to 500 employees and £6 million, respectively, and the gross assets limit will quadruple to £120 million. The maximum holding period will also be increased to 15 years, and this can be applied to both new and existing EMI contracts. This is an extremely welcome development and will help many of our members already reaching this limit.

These changes only shortly follow those introduced alongside the launch of the PISCES scheme.

Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT)

The tax-advantaged EIS, SEIS and VCTs have underpinned the increase in early-stage venture investment across a range of sectors in the past decade.

Enterprise Investment Schemes (EIS and its Seed equivalent SEIS) are designed to incentivise investment into relatively small, higher risk companies by providing tax reliefs to investors. Venture Capital Trusts (VCTs) are listed investment companies that then pool funds from individual investors to then invest into smaller, high-risk companies.

For these schemes, April will usher in significant increases to the fundraising limits. The annual limits for knowledge intensive companies (KICs) will increase from £10 to £20 million, and the lifetime limits will jump from £20 to £40 million. Gross asset thresholds have also been doubled (to £30 million before new investment and £35 million immediately after), greatly increasing the eligibility of scaling companies.

However, it is worth noting one very small concession. The VCT upfront income tax relief will decrease from 30% to 20%, to better balance the amount of upfront tax relief offered compared to EIS, where dividend relief isn’t available.

The work continues

These changes represent another significant step within a sustained effort to ensure that the tax system is working for our most innovative companies – an effort that BIA has been at the forefront of for the last five years, with much of this progress driven by our Finance and Tax Advisory Committee (FTAC).

Our submission to the Autumn Budget calling for these changes, and their subsequent announcement is, in many ways, a culmination of these efforts. However, there is always more to be done. HM Treasury’s recent Tax Support for Entrepreneurs: Call for Evidence intended to gather views and evidence on tax policy support for investment in high-growth companies and represents the beginning of an ongoing process to evaluate the entire tax landscape for entrepreneurs.

BIA submitted a response to this call, recommending further changes to the EMI, EIS, and VCT schemes, amongst others. We will continue to work closely with HM Treasury to make sure that any changes to the tax system benefit the life sciences, and so with this in mind, it is likely that the schemes most relevant to you will be receiving additional changes in the not too distant future. Watch this space!