For years, the Enterprise Investment Scheme was a tool for early-stage raises. Its company limits meant that once a business reached a certain size, or needed a larger round, it simply fell outside the scheme.
That changed on 6 April 2026. Following the November 2025 Budget, the main company limits roughly doubled, bringing a much larger group of growing companies, and much bigger rounds, within scope. This is what changed, what did not, and what it means in practice.
What changed
The key increases apply to the company, not the investor:
- Annual investment limit: up from £5 million to £10 million for standard companies, and from £10 million to £20 million for knowledge-intensive companies.
- Lifetime investment limit: up from £12 million to £24 million for standard companies, and from £20 million to £40 million for knowledge-intensive companies.
- Gross assets test: the maximum gross assets rose from £15 million to £30 million before the share issue, and from £16 million to £35 million immediately after.
These limits count investment from all the tax-advantaged venture capital schemes together, so SEIS and VCT money raised by the company still counts towards the totals.
What did not change
- Investor relief remains 30% income tax relief, on up to £1 million a year, or £2 million where at least £1 million goes into knowledge-intensive companies.
- Holding period remains at least three years to keep the relief.
- Employee limits remain fewer than 250 full-time equivalents, or fewer than 500 for knowledge-intensive companies.
- Age limits remain, broadly, seven years from first commercial sale, or ten for knowledge-intensive companies.
- SEIS is unchanged: 50% relief, a £250,000 company limit and a £350,000 gross assets test. We compare the two schemes in SEIS and EIS: the differences that matter.
Venture Capital Trusts moved the other way: their income tax relief fell from 30% to 20% from the same date, which makes direct EIS investment comparatively more attractive for some investors.
Who benefits
The biggest change is for companies that had outgrown the old limits but are still young enough to qualify on age and headcount. In practice that means:
- Series A and B rounds that were previously too large, or that would have used up the lifetime allowance in one go.
- Capital-intensive businesses in areas such as manufacturing, energy, infrastructure technology and life sciences, whose balance sheets breached the old £15 million gross assets ceiling.
- Companies raising repeatedly, which now have far more headroom before hitting the lifetime cap.
- Pre-IPO companies that want to offer UK investors EIS relief in a final private round before listing. See IPO readiness.
What still trips companies up
Higher limits do not change the qualifying rules, and the most common problems remain the same:
- Trades that are excluded, such as property development, financial activities and certain asset-backed businesses.
- Share rights that give preference on dividends or capital.
- Money raised through convertible loan notes, which generally does not qualify. See convertible loan notes explained.
- Investors who are connected to the company in ways the rules do not allow.
- Use of funds that is not clearly for growth.
Advance assurance remains the best way to test a raise before shares are issued. Our guide to SEIS and EIS advance assurance covers the process.
For overseas companies
EIS is a UK scheme, but the issuing company does not have to be UK-resident. It must have a permanent establishment in the UK and meet the other conditions. For internationally headquartered businesses with a UK operation, the higher limits make EIS worth revisiting as a way to attract UK investors alongside a wider international raise.
The short version
From April 2026, EIS can support rounds up to £10 million a year, £20 million for knowledge-intensive companies, in businesses with up to £30 million of gross assets. For a large group of growing companies that were previously too big, the scheme is back on the table. The qualifying rules have not relaxed, so the preparation matters as much as ever.
Figures are as announced for the 2026/27 tax year and may change. Take specialist tax advice before relying on the schemes.
Mark Johnson is a Director of BDM Wealth Management, which introduces capital raising opportunities across bonds, loan notes, IPOs and SEIS/EIS. To discuss a raise, get in touch.
BDM Wealth Management is an introduction business and is not regulated. This article is general information, not financial, tax or legal advice, and does not constitute an offer or invitation to invest. Capital is at risk and you may get back less than you invest. Tax treatment depends on individual circumstances and may change. For high-net-worth and sophisticated investors only. Take independent professional advice before making any investment decision.