The Autumn Budget 2025 slashed Venture Capital Trust (VCT) income tax relief from 30 % to 20 % from April 2026 and froze the SEIS annual investor limit at £200k instead of raising it to £250k as promised in the manifesto. The result? Early-stage investment fell 31 % in Q3 2025 alone – the worst quarter since 2012 (Beauhurst State of UK Investment Report 2025). Seed deals collapsed 46 % by value.
VCTs and EIS/SEIS are the oxygen for British tech and life-science start-ups. When relief is cut, pension funds and high-net-worth individuals simply walk away. A single £5 million Series A round that would have closed in June is now delayed until 2027 because the lead investor pulled out after the Budget.
Large corporates and private equity still have cash. Early-stage founders do not. 68 % of UK unicorns started with SEIS or EIS money. Starve that pipeline and Britain’s next DeepMind or Revolut never gets off the ground.
We demand an immediate reversal:
- Restore VCT income tax relief to 30 % permanently.
- Raise the SEIS annual investor limit to £250,000 and the company raising limit to £250,000 (from £200k/£150k).
- Raise the EIS lifetime company limit to £12 million (from £10 million) and add a 10 % CGT deferral relief for gains reinvested into SEIS/EIS within 12 months.
- Total cost to the Treasury: £340 million a year – less than 0.4 % of the £90 billion corporation tax take and fully recouped within four years through higher growth and jobs (Frontier Economics 2025 modelling).
This is not subsidy; it is the cheapest industrial strategy Britain has ever had. Every £1 of tax relief generates £6–£8 in extra GDP (HMRC 2024 evaluation). Ireland, France, and Sweden all offer more generous early-stage incentives and are eating our lunch.
Cut relief and you cut the future. Restore it and we keep building world-class companies in Britain.
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