Better tools to reward key staff
Budget 2025 expands Enterprise Management Incentive (EMI) limits:
- More employees can qualify
- Higher company size thresholds
- Bigger share option limits
- Longer holding periods
For growth-focused small businesses, this is great news: EMI is one of the most powerful ways to reward and retain key people.
Funding changes: VCT/EIS
- Company investment limits for VCT/EIS increase, good for ambitious, scalable businesses.
- But VCT income tax relief for investors drops from 30% to 20%, which may affect appetite.
EOT exits: still attractive, but less generous
Full CGT relief on qualifying disposals to Employee Ownership Trusts (EOTs) falls to 50% of the gain from late 2025. EOTs will still be attractive in many cases, but not as tax-sheltered as before.
Action steps for founders and owners
- If you’re scaling, get EMI in place
Use the more generous limits to create meaningful upside for key team members. - Position your company for EIS/VCT
If external funding is on the horizon, structure now so you’re attractive to tax-advantaged investors. - Review your exit route
- Third-party sale?
- Management buy-out?
- EOT?
The Budget changes tweak the numbers but don’t remove the options.
- Get your cap table and documents in order
Clean, simple structures make everything from EMI to EIS to exits much easier and cheaper to implement.
How can we help at MDH
Book a quick tax chat with me, no strings attached. We’ll have a look at your situation and spot opportunities you might be missing. And as a thank-you, I’ll send you a free copy of our book 75 Ways to Pay Less Tax, packed with simple, practical tips you can put to work straight away. Let’s make sure your money’s working smarter, not harder.
