As a member of the EIS Association, Innovate Capital Partners attended the latest EISA Forum to hear directly from across the market. Here are some of the key takeaways that stood out to us.
Market data
2026 is a strong year. UK private company investment is forecast just under £30bn across about 6,000 deals, up from around £23bn and 4,700 deals so far this year.
AI drove a record 2025. It was the best year on record for companies raising their first round. First-time deals made up 43% of all deals, and AI investment is forecast at about £18bn.
Raising a second round is hard. The median deal is also a company’s first deal.
Fewer investors are active. The pandemic-era “tourist” investors have pulled back, leaving roughly 1,500 investors in the market.
Exits are happening, but liquidity is tight. About 40% of money invested in 2017 has exited, and 36% for 2020. But a record 25,000 companies are still waiting for an exit or secondary capital. Henry thinks the Mansion House pension reforms, aimed at secondary capital, are the answer.
Founders’ relief is badly designed, in Beauhurst’s view. They’ve launched a survey on it with Startup Coalition.
Tax and budget
SEIS and EIS limits and conditions are unchanged, with no new restrictions.
Three admin traps were fixed:
Over-claiming on an EIS1 form now just reduces the relief instead of voiding it.
The rule on issuing SEIS and EIS on the same day has been relaxed.
One late payer no longer puts the whole round’s relief at risk.
Advance assurance stays, and HMRC roundtables early next year will look at speeding it up.
CGT rates are unchanged. The BADR lifetime limit is cut to £500k from 6 April.
New founders’ relief: a £10m lifetime limit at 10%. The conditions are stretching:
you must have held 25% of the company from the start;
the company needs £10m turnover and a substantial UK presence;
it must pass two of three growth tests.
The committee expects few founders to qualify, and there’s a consultation open until the end of November.
Income tax: rates on savings and property income go up by a further 2%.
EMI 2 is a rebadged CSOP. It is now separate from the EMI limit, the exercise window goes from 10 to 15 years, and the window after a disqualifying event goes from 90 to 180 days.
Inheritance tax: a £2.5m business property relief allowance reinforces the inheritance tax case for EIS. Unused pensions fall into estates from next April.
Government response to the industry’s requests:
no extension to the age limit;
more relaxed on follow-on investment;
more scrutiny of high fundraising fees and overseas companies;
advance subscription agreement long-stop dates should be six months or less;
it supports raising awareness of the schemes.
Regulation
The FCA presents itself as pro-growth, but stays firm on financial crime and high-risk retail investments.
Product summaries for consumer composite investments replace KIDs. They’re mandatory by June 2027, and most EIS funds are in scope, so plan to switch around tax year end.
AI: there’s no new rulebook. Firms will be judged on outcomes through four lenses using existing rules, and SMCR accountability applies.
New fund manager regime in 2028, with small, medium and large tiers. Some small managers face a step up, while some full-scope managers may save. Minimum capital requirements are likely to rise.
Conflicts of interest paper: worth doing a gap analysis now, especially on conflicts between funds.
The high-risk marketing rules are being reviewed. The appropriateness test is likely to change. The FCA wants data on any drop-off in non-advised sales, and the committee wants that data now.
