The UK’s Enterprise Investment Scheme (EIS) investment market is entering a new phase following the publication of the latest HM Revenue & Customs (HMRC) statistics and changes to company fundraising limits introduced in April 2026.
The latest available figures, published in May, show that companies raised £1.575 billion through the Enterprise Investment Scheme during the 2024/25 tax year. A total of 3,735 companies received investment, highlighting the scheme’s continuing role in providing finance to growing UK businesses.
The figures arrive at an important time for investors researching EIS funds, with higher fundraising limits now giving many qualifying businesses greater scope to attract capital. For investors, the combination of established demand for EIS funding and a revised regulatory framework makes it worth examining how funds operate, where they invest and the risks involved.
Latest figures reveal the scale of EIS investment
HMRC’s latest annual statistics provide an insight into the businesses benefiting from the scheme and the sectors attracting investor capital.
During 2024/25, 3,735 companies raised a combined £1.575 billion through EIS. This was broadly consistent with the previous tax year, when 3,775 companies raised the same total amount.
The figures suggest that the scheme continues to provide a substantial source of funding for smaller businesses, although the number of companies receiving investment and the amount raised can vary from year to year.
The information and communication sector accounted for approximately £550 million, representing around 35% of total EIS investment. Companies registered in London and the South East raised £948 million, equivalent to approximately 60% of the overall total.
These figures illustrate the importance of technology and other information-based businesses within the EIS market, while also highlighting the geographical concentration of investment.
For investors considering EIS funds, the data provides useful background when assessing a fund’s investment strategy. However, historic sector allocations should not be treated as a prediction of future returns, and individual funds can differ considerably in their approach.
April 2026 changes create greater fundraising capacity
One of the most significant recent developments for the EIS market is the increase in the fundraising limits available to qualifying companies.
Changes introduced from 6 April 2026 increased the annual investment limit for most qualifying companies from £5 million to £10 million. Their lifetime fundraising limit increased from £12 million to £24 million.
For qualifying knowledge-intensive companies, the annual limit increased from £10 million to £20 million, while the lifetime limit rose from £20 million to £40 million.
The gross asset thresholds also increased for most qualifying businesses, allowing companies with larger balance sheets to access the scheme, subject to the applicable conditions.
These reforms are intended to help businesses secure the funding required to develop products, recruit employees and expand their operations.
For EIS fund managers, the changes could broaden the range of eligible businesses capable of accepting investment and create greater flexibility when supporting companies through successive stages of growth.
However, the revised limits do not automatically make every company eligible for EIS funding. Businesses must still meet the relevant statutory requirements, including the rules governing qualifying trades, age, investment use and risk to capital.
Why investors consider EIS funds
Investing through an EIS fund can offer an alternative to selecting individual companies. Depending on the structure, a fund may spread capital across several qualifying businesses, providing exposure to a range of investment opportunities rather than relying on the performance of a single company.
This can be attractive to investors who want access to early-stage and growth businesses but do not have the time or resources to assess every potential investment independently.
Fund managers typically identify companies, conduct due diligence and oversee investments within a defined strategy. Their experience, investment criteria and ability to support portfolio businesses can therefore be important considerations when comparing different funds.
However, diversification does not eliminate the risks associated with EIS investing. A portfolio can still experience substantial losses if several companies fail to achieve their objectives, and investments in unquoted businesses can be difficult to value or sell.
Investors should also distinguish between a fund marketed as an EIS investment product and an HMRC-approved knowledge-intensive EIS fund. The latter is a specific arrangement subject to additional requirements, including rules governing the proportion of capital invested in qualifying knowledge-intensive companies and the timing of investments.
The structure of a fund can affect when shares are treated as issued for tax purposes and how investors receive the relevant compliance documentation.
Understanding the tax advantages
Tax relief remains a central consideration for individuals exploring EIS funds.
Eligible investors can generally claim Income Tax relief at 30% of the amount invested, subject to the applicable rules. The standard annual investment limit for an individual is £1 million, rising to £2 million where the amount above £1 million is invested in qualifying knowledge-intensive companies.
Other potential tax advantages include Capital Gains Tax exemptions on qualifying shares and loss relief where an investment results in an allowable loss. These benefits are subject to statutory conditions and an investor’s individual circumstances.
For example, an eligible investor who subscribes £20,000 for qualifying EIS shares may be able to claim £6,000 in Income Tax relief, assuming sufficient tax liability and that all requirements are met.
That relief can reduce the effective initial cost of the investment, but it does not protect the investor from commercial losses. If a company fails, the value of its shares can fall to zero, and any additional loss relief will depend on the applicable rules.
Investors should therefore consider tax advantages alongside the underlying investment strategy, the quality of the businesses selected and the potential for capital loss.
What should investors look for when comparing EIS funds?
The growing range of EIS investment opportunities makes it important to look beyond headline tax benefits when comparing funds.
Several factors deserve particular attention.
Investment strategy: Investors should understand which sectors, business stages and types of companies a fund targets. A strategy focused on early-stage technology businesses may carry different risks from one investing in more established companies.
Portfolio construction: The number of investments, expected allocation per company and approach to diversification can influence the overall risk profile. Investors should examine how much capital may be exposed to individual businesses.
Manager experience: The fund manager’s track record, due diligence process, governance arrangements and approach to supporting portfolio companies can all be relevant. Past performance is not a reliable indicator of future results.
Fees and costs: Management fees, performance-related charges and other expenses can affect net returns. Investors should understand how these costs are calculated and when they apply.
Liquidity and exit prospects: EIS shares are generally unquoted and may be difficult to sell. Investors should assess the expected investment period and the realistic options for realising value.
Tax eligibility: The availability of EIS relief depends on the qualifying status of the investments and compliance with the relevant rules. Investors should understand the documentation required and the circumstances in which relief could be reduced or withdrawn.
These considerations can help investors compare funds on their underlying merits rather than relying solely on the advertised tax benefits.
The outlook for EIS funds
The latest HMRC statistics show that EIS continues to channel substantial amounts of private capital into UK businesses, while the changes introduced in April 2026 have expanded the fundraising capacity available to many qualifying companies.
The immediate question is whether these higher limits will translate into increased investment and enable more businesses to secure the funding they need to scale. Future HMRC releases will help establish whether the reforms are associated with changes in fundraising activity, sector allocations and the number of companies receiving investment.
For investors, EIS funds may offer a route into businesses with significant growth ambitions, supported by tax incentives intended to encourage investment in higher-risk companies.
Nevertheless, outcomes will depend on the quality of individual investments, the judgement of fund managers and the ability of portfolio companies to build sustainable businesses.
Investors considering the market should take time to compare fund structures, understand the risks and assess whether the investment period and potential illiquidity are compatible with their financial circumstances.
As the revised rules become established, EIS funds are likely to remain an important consideration for investors seeking exposure to UK entrepreneurial businesses. The latest figures provide a useful starting point, but careful due diligence remains essential before committing capital.
This article is for general information only and does not constitute financial, investment or tax advice. EIS investments are high risk, may be illiquid and can result in the loss of capital. Tax relief depends on eligibility and individual circumstances. Investors should seek independent professional advice where appropriate.
