Rewarding and incentivising key staff
Reeves announced an increase in company eligibility limits for the popular, most tax efficient employee incentive programme, Enterprise Management Incentive Scheme (“EMI”), which has historically targeted start-ups. From 6 April 2026, the limits for eligible companies able to grant EMI options will increase:
- The number of employees from 250 employees to 500 employees
- Company gross assets from £30 million to £120 million
- Company share option limit from £3 million to £6 million
The maximum holding period for the options will increase from 10 years to 15 years, this includes existing EMI contracts – in a drive to incentivise employees to retain their interest in the company for the long haul.
As part of this EMI reform, it has been confirmed that the current annual notification requirements will also be removed from April 2027, reducing the administrative burden for companies upon the grant of options.
As a result of this eligibility expansion, a greater number of employees will be able to acquire shares in their employing company and take advantage of Business Asset Disposal Relief on the gain upon the sale of the shares (taxed at 18% from 6 April 2026), subject to satisfying certain statutory conditions.
Enticing investors
In a bid to incentivise greater investment in scaling companies, the Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) investment limits are set to increase to £10 million from 6 April 2026, allowing investment as companies grow beyond the start-up phase.
On top of this, with a view to better balance the upfront tax relief offered by VCTs compared to the EIS and incentivise funds to support high-growth companies, the Chancellor has pledged to reduce the upfront VCT Income Tax relief from 30% to 20%.
UK Listing Relief from Stamp Duty Reserve Tax
As of 27 November, the transfer of a company’s securities will be subject to relief from the 0.5% Stamp Duty Reserve Tax charge for three years from the point the company lists on a UK regulated market.
Each of these measures appear to be a nod to Reeves’ commitment to drive UK economic growth by investing in local assets and businesses, especially those with high potential.