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The Autumn Budget introduced important changes that will affect how small and medium sized businesses can raise investment through the Enterprise Investment Scheme and Venture Capital Trusts. From April 2026 the amount a company can raise each year through these schemes will increase from £5 million to £10 million. Companies that invest heavily in research and development will be able to raise up to £20 million each year, which is double the current limit. The total amount a business can raise over its lifetime will also rise, and the rules about how large a company can be before it becomes ineligible have been relaxed so that more growing firms can qualify.
These changes show that the government wants to encourage investment in businesses that are ready to expand. For many SMEs this means there will be greater opportunity to attract funding that can support new staff, new products, or wider market reach. The higher limits and broader eligibility mean the schemes will no longer be suited only to very early-stage start ups. They now offer more realistic support for businesses that have already grown to a certain size and want the financial backing needed to move to the next stage.
There is however a point to be aware of for businesses that rely on VCT funding. The income tax relief that investors receive when they buy VCT shares will fall from thirty per cent to twenty per cent. This reduction may make VCT investment slightly less appealing to some individuals, which could influence the availability of VCT funds.