We are pleased the Chancellor moved ahead with several initiatives the QCA has consistently campaigned for. Her ongoing focus on UK capital markets is very welcome.
Channelling more capital into UK-quoted companies via ISAs and by expanding several investment schemes is a win-win for entrepreneurial businesses, regional growth and wealth creation. But reducing some tax relief risks blunting progress.
We will continue to work closely with Government to highlight our members’ hugely important economic contribution – and what more can be done so they prosper further.
James Ashton
Chief Executive
Reform of the ISA Regime
The Chancellor announced a package of ISA reforms to incentivise investment and drive better returns for savers. This includes:
- Reducing the cash ISA limit to £12,000 from April 2027 – with a carve out for over-65s
- Stocks & Shares ISA limit remains at £20,000
Financial services firms will provide new, easily navigable ways for people to find the right UK investment for them, supporting savers to invest in British companies. This shift is of particular importance to our members. Retail investors play a vital role in providing patient, diversified capital that helps growth companies scale, innovate and create high-value jobs.
A clearer, simplified ISA structure, supported by new online hubs designed to guide savers towards UK-focused investment options, has the potential to increase awareness and accessibility, directing more of the nation’s savings towards the businesses that underpin regional and national economic growth.
Strengthening retail participation can also help address one of the most pressing challenges facing the UK’s public markets: the sustained outflow of capital from domestic equities. Encouraging more individuals to invest in UK-listed companies, including those on our growth markets, can help deepen market liquidity, broaden ownership and reinforce the role of public markets as engines of economic resilience.
Stamp Duty on Share Trading
The Government has announced a new UK Listings Relief, providing newly listed companies with an exemption from Stamp Duty Reserve Tax for the first three years of their listing. This measure will apply immediately from 27 November 2025. The QCA welcomes this reform and has consistently advocated for its inclusion in the Budget.
A UK listings relief will help encourage more companies to choose the UK public markets, improving the pipeline of new issuers and strengthening market liquidity. The Government, recognising the need to maintain responsible fiscal policy, will continue to evaluate stamp taxes on shares to ensure the UK is positioned well for the future, and best supporting the competitiveness of our world-leading capital markets.
The QCA will continue to make the case for the complete removal of stamp taxes on share transactions, which we believe would further enhance market competitiveness and support a stronger flow of investment into UK-listed companies.
EIS and VCT Relief
The Government has reduced the Income Tax relief that an individual can claim when investing in VCTs from 30% down to 20%. This reduction will bring the relief in line with the EIS scheme. Alongside this, the Government has announced an increase to the VCT and EIS limits. Specifically, these changes relate to:
- Annual company investment limit: these will be raised from £5mn (£10mn for knowledge intensive companies) to £10mn (£20mn for knowledge intensive companies)
- Lifetime company limit: these will be increased from £12mn (£20mn for knowledge intensive companies) to £24mn (£40mn for knowledge intensive companies)
- Gross assets test: this will be raised from £15mn before share issue to £30mn before share issue, and £16mn after share issue to £35mn after share issue.
These changes will be effective from 6 April 2026.
We welcome the Government’s decision to raise the VCT and EIS limits as, in principle, these changes should support greater investment into smaller growth companies. However, the reduction in income tax relief for VCT investors risks undermining these positive steps by weakening the incentive for individuals to commit capital to early-stage and scaling businesses. Maintaining a strong pipeline of retail and high-net-worth investment is essential to ensuring these companies can access the long-term patient capital they need to grow, innovate and create jobs across the UK.
EMI Qualifying Limits
The Government is significantly expanding EMI company eligibility to increase access to talent support for scaling companies, enabling them to offer competitive remuneration packages. The employee limit and the company share option limit will both double to 500 employees and £6 million respectively, and the gross assets test will quadruple to £120 million. The maximum holding period will also be increased to 15 years, and this can be applied to existing as well as new EMI contracts.
For QCA members, these changes will make the EMI scheme far more accessible and flexible. A higher employee threshold and a larger company and share-option limit mean more growing businesses will now qualify to offer meaningful equity-based remuneration. Extending the holding period also gives companies greater room to design long-term incentive structures that help attract and retain specialist talent in a competitive labour market. Taken together, these reforms strengthen the ability of smaller and mid-sized quoted companies to recruit, motivate and retain the skilled teams they need to deliver sustained growth
Salary Sacrifice: NIC’s on Pension Contributions
The Government has confirmed that pension contributions made through salary sacrifice above a £2,000 limit will now be subject to National Insurance. This change reduces the tax advantage of pension saving through salary sacrifice and will increase costs for both employers and employees.
As pension contributions adjust, there may also be an effect on the flow of savings into UK equity markets. The QCA will continue to engage with policymakers to ensure future pension reforms support long-term investment in UK growth companies.
Tax Support for Entrepreneurs: Call for Evidence
The Government has announced a call for evidence on tax policy support for investment in high-growth UK companies. HM Treasury will consider responses to assess the impact, accessibility and generosity of existing schemes, and explore potential policy options to go further. The QCA will be responding to this call for evidence in due course.
