The UK government has unveiled a £100 million package of measures aimed at unlocking private investment for the country’s entrepreneurs, start-ups, and scale-ups, but business leaders have voiced concerns that established small firms are being overlooked. Critics also described the broader strategy for enterprise as “in a muddle.”
Introduced at the start of the new tax year, the changes expand eligibility for the Enterprise Management Incentives (EMI) scheme, which allows qualifying companies to offer employees tax-advantaged share options. The package also doubles the amount a company can raise through the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs), both designed to channel capital towards higher-risk, early-stage businesses that often struggle to secure growth funding.
Chancellor Rachel Reeves said the measures reflected the government’s commitment to “backing business with a more active state” and making “big commitments to industry.” She added that the initiatives would help wealth creators access the finance critical to their success.
Despite the government’s optimism, reception from the business community has been cool. Critics noted the contrast between the £100 million in incentives and the £25 billion a year now raised from employers following the increase to National Insurance (NI) contributions.
Katrina Young, a digital transformation strategist at KYC Digital, said the policy left out many small, established firms. The expanded EIS, VCT, and EMI reliefs are limited to companies with gross assets up to £120 million and up to 500 employees, she noted, excluding dental practices, family logistics firms, and small bakery chains. “These are the businesses that employ the bulk of the workforce yet face an additional £900 per employee per year since the NI threshold was cut from £9,100 to £5,000,” Young said. She highlighted British Chambers of Commerce data showing 82% of firms expect the NI rise to affect their business, with 58% anticipating reduced recruitment.
The hospitality sector offered particularly blunt criticism. Jess Magill, co-founder of Devon-based Powderkeg Brewery, said support for new companies is “pointless” if established businesses are being taxed into closure. She warned that popular venues are shutting weekly, with a knock-on effect on suppliers.
Colette Mason, an AI consultant at London-based Clever Clogs AI, called the £100 million package “miserly” compared to the NI rises. She noted that EMI expansion targets roughly 1,800 scale-up companies over five years, many already attractive to investors, while businesses employing most people are cutting hours, freezing wages, and reconsidering hiring plans.
Samuel Mather-Holgate, managing director of Swindon-based Mather and Murray Financial, argued the government is sending “mixed signals,” increasing fundraising limits while simultaneously reducing investor benefits. He said the UK must incentivise companies not only to start but also to stay on British soil.
The announcement is likely to intensify debate over whether the government’s growth agenda is effectively supporting the businesses that need it most or merely redistributing a fraction of the funds it has already collected.
