Autumn Budget 2025: What changed for UK businesses?

Big shifts in the Autumn Budget are opening new doors for share schemes. For years, we’ve been one of the loudest voices pushing for fairer, simpler, and more accessible employee ownership in the UK. So you can imagine our reaction! 

How Vestd shaped the conversation on employee ownership

Long before this year’s Budget landed, we were already making noise: writing open letters, rallying founders, coordinating cross-industry support, and campaigning to modernise the rules around share schemes.

We've done this because employee ownership isn't a marketing line for us: it's our mission. Every employee should have the opportunity to share in the value they help create, and the UK should be the best place in the world to grow and reward teams with shares.

In the run-up to previous Budgets, we coordinated large-scale campaigns urging simplification of Enterprise Management Incentives (EMI), modernisation of the tax system (including protecting BADR), and regulatory approaches that reflect how modern scaling companies actually operate. 

Last year, we publicly called on the Chancellor to make employee ownership work better for growing businesses - including writing to key figures in government (yes, including Rachel Reeves!) and bringing major employers together to push for change.

Not to mention building business case after business case to raise awareness of the transformative impact of share ownership on businesses, their hardworking teams and the wider economy.

We even turned May 22nd into National Share Scheme Day!

This history matters because the Autumn Budget was shaped by many of the very issues we've been spotlighting for years: expanding access, increasing company eligibility, and making liquidity more realistic for private companies. 

For UK SMEs, scalups and their teams, this Budget is genuinely impactful.

EMI: eligibility expanded, limits increased, friction reduced

The standout headline for many founders is the significant expansion of EMI company eligibility.

From April 2026 (not before):

• The employee limit rises to 500

• The gross assets limit rises to £120 million

• The company's share option limit doubles to £6 million

• The maximum holding period extends to 15 years, applying retrospectively

• The current EMI notification requirement will be removed from April 2027

This upcoming change is a meaningful one. Previously, many scaleups “grew out” of EMI too quickly, forcing them to move employees onto less tax-friendly schemes (EMI is hard to beat!) or stop granting options altogether. 

By increasing the size thresholds and doubling the option limit, the government is acknowledging the reality of modern scale-ups: they employ more people, raise more capital, and need more flexible ways to attract and retain talent.

It’s a clear win for the ecosystem, and a validation of the long-running arguments Vestd and our customers have made for years: that EMI must evolve to remain relevant for growth-stage companies.

The removal of the notification requirement will also remove an administrative trapdoor. Every year, companies lose their EMI status due to missed or incorrectly filed notifications. 

Our customers never needed to worry, as the Vestd platform automatically sent out reminders. But for those not using ShareTech, removing this requirement will certainly reduce stress, risk and cost, and make the scheme genuinely more accessible.

CSOP, EMI and PISCES: a turning point for private-company liquidity

One of the most interesting changes is the government’s move to allow existing EMI and CSOP contracts to be amended so that PISCES events count as exercisable events - effective retrospectively from 15 May 2025.

For anyone unfamiliar, PISCES is the FCA-backed Private Intermittent Securities and Capital Exchange System. 

It's designed to let private companies create more controlled, event-based liquidity opportunities without listing publicly or relying on ad hoc secondary transactions. 

In other words, it should make buying and selling private company shares easier, safer and more predictable.

We’ve been involved with the PISCES consultation process, illuminating representatives on the practical challenges companies face when offering liquidity to employees and shareholders. 

The framework matters because liquidity has long been the missing piece in UK employee ownership. Share incentives are meaningful, but only when people can realise that value.

Now, companies will be able to offer structured access to liquidity without waiting for a sale or IPO.

This change will accelerate the adoption of PISCES, help scaling companies retain talent, and bring more fairness to teams who’ve worked hard for their equity.

EIS and VCT: significant increases to investment limits, but with a notable trade-off

From April 2026, the government is increasing company investment limits for both Enterprise Investment Schemes (EIS)  and Venture Capital Trusts (VCT):

• The VCT and EIS company investment limit rises to £10 million

• Knowledge Intensive Companies (KICs) can raise £20 million

• The lifetime fundraising cap becomes £24 million, or £40 million for KICs

• The EIS and VCT gross assets test increases to £30 million before and £35 million after the share issue

• However, the VCT income tax relief decreases from 30% to 20%

The higher limits will help bridge a long-criticised funding gap: early-stage companies have support, but later-stage growth capital has often lagged.

By lifting those ceilings, the government is encouraging investors to continue supporting companies as they scale beyond the seed/Series A phase. The reduction in VCT income tax relief from 30% to 20% is a noticeable change.

The government’s stated intention is to rebalance incentives across EIS and VCTs, but it may dampen some appetite in the short term. Still, the expanded eligibility and higher limits may offset some of this effect.

For SMEs, especially ambitious scaleups, the increased investment headroom is welcome news despite the trade-off.

EOTs: CGT relief cut to 50%

The most controversial measure is the reduction of the Capital Gains Tax relief on disposals to Employee Ownership Trusts. Currently, owners can sell qualifying shares to an EOT and pay 0% CGT. Under the new rules, owners will pay tax on 50% of the gain. 

The government's motivation is clear: the cost of the relief has ballooned far beyond original expectations, and they need to address it. While the incentive remains attractive, this reform will change the calculation for some founders considering the EOT route.

Share schemes such as EMI, CSOP or growth shares may now become more appealing alternatives or complements. So while EOTs remain valuable structures, we expect more companies to revisit traditional share schemes as part of their long-term succession planning.

Dividends, NIC and pay strategies: the silent Budget subtext

Several budget changes indirectly make share schemes more attractive:

Dividend tax increases

Dividends have grown in popularity since the previous CGT increases. Many owners saw them as a viable alternative for returning value. But with dividend tax rising again, they're going to look less appealing, especially compared to tax-advantaged EMI or CSOP gains.

Limits on NI relief for pension sacrifice

National Insurance relief caps also weaken the traditional "bonus + pension sacrifice" route. Share option schemes, however, do not usually incur NI contributions - a structural advantage that becomes more important as other routes narrow.

Taken together, these changes subtly incentivise equity participation for long-term value sharing.

What this means for growing businesses (and why Vestd is here)

More companies will qualify for EMI. More companies will be able to grant meaningful options to their teams. More companies will be able to access growth capital. And more private companies will finally have clear, regulated liquidity routes through PISCES.

This isn’t just good news…it’s a genuine milestone worth celebrating! Share schemes are about to become more accessible, more flexible and more valuable.

We’ve spent years calling for a modernised, simplified, more equitable system - because we believe in what employee ownership can do for people and for the economy. 

This Budget shows the kind of progress we have been campaigning for. Now it’s time to help UK businesses make the most of it. This is what we do best. Book a free consultation today to see for yourself.

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If you’re already with us and would like to understand how these changes may impact your scheme(s), our team is here to help. Simply drop your share scheme specialist a line.