What’s new under the entrepreneurship relief package (from 6 April 2026)
As of the start of the 2026-27 tax year, the UK government has rolled out a significant entrepreneurship tax relief package aimed at encouraging investment in start-ups, scale-ups and innovation-led businesses. These include the following changes:
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Expanded eligibility for EMI (Enterprise Management Incentives): • Max value of options increased from £3 million to £6 million. (gov.uk)
• Gross asset ceiling raised from £30 million to £120 million. (gov.uk)
• Employee headcount threshold raised from fewer than 250 to fewer than 500. (gov.uk)
• Maximum holding period extended from 10 years to 15 years. (gov.uk) -
Other reliefs also enhanced: • The UK Listings Relief and Venture Capital Trusts are part of new support measures. (gov.uk)
• £100 million of new investment triggered under this package aimed at unlocking private capital. (gov.uk)
Why these changes matter
These reforms give far more flexibility to start-ups, founders, and investors:
- Larger firms can now qualify for EMI, offering tax advantages when issuing share options.
- Founders/employees can expect longer time horizons (up to 15 years) to vest/share without triggering unwanted tax liabilities.
- Investors and equity-holders benefit from more tax-efficient exit potential via improved reliefs.
EXAMPLE: A tech start-up with gross assets of £100m and 300 employees can now grant EMI options (formerly excluded). Employees can hold them for 15 years and enjoy capital gains treatment rather than income tax (under qualifying conditions).
Practical steps for founders, employees, and advisers
- Founders: ensure your company qualifies under the updated limits. If you’re close to a threshold (asset value, employee count), now is the time to assess and plan.
- Employees: if offered options, check grant date (from 6 April 2026 onwards), exercise price, and whether the holding period suffices to benefit fully from the reliefs.
- Advisers: review existing option agreements and whether they can be amended to reflect new limits, particularly lengthening exercise windows.
- Legal/tax compliance: verify scheme registration, employee eligibility, and fulfill reporting obligations (grant notifications, etc.).
Risks & considerations
- Exceeding thresholds (asset value or employee count) can disqualify EMI treatment.
- Extended holding periods add duration risk (e.g. company performance, valuation, exit timing).
- Changes must be documented carefully—option grants, amendments must comply with updated legislation.
- Liquidity and exit event timing matters: capital gains relief benefit depends on achieving a taxable event under qualifying rules.
Bottom line
If you're involved in a UK start-up—founder, early employee, investor—these changes offer a golden window. Now is the time to review your equity structures, plan option grants, and ensure you hit the new thresholds. With planning, this can enhance rewards and reduce tax drag when exits come.