What the Autumn Budget 2025 means for VCT investors

The November Budget placed considerable emphasis on supporting the scale-up and growth ambitions of UK companies. For Venture Capital Trusts (VCTs), this translated into several material changes that investors will want to understand. Below, we break down the key measures, the opportunities they create, and the points investors should keep in mind.

A reminder of the role of VCTs

VCTs are publicly listed companies that raise money from investors and use it to back early-stage businesses seeking capital to expand, hire and innovate. Many well-known UK brands began their journey with VCT support, and for investors it can be rewarding to see a young company evolve into a recognised name.

VCTs come with higher risk, and not every portfolio company will succeed. To recognise this risk, the government currently offers income tax relief of up to 30% on the first £200,000 invested each tax year, alongside other benefits such as tax-free dividends. These incentives have long played a part in encouraging investment into young, growth-focused companies.

Support for scaling businesses

The Budget outlined generous increases to the amount of funding companies can receive from VCTs which comes into effect from April 2026:

• Annual investment limits will rise from £5 million to £10 million, or up to £20 million for knowledge-intensive companies.
• Lifetime limits will also double, increasing from £12 million to £24 million, and from £20 million to £40 million for knowledge-intensive companies. The maximum gross assets a company can have at the point of VCT investment will increase from £15 million to £30 million, and then to £35 million immediately after investment.

These changes are expected to broaden the universe of eligible companies, allowing more established businesses to secure long-term growth capital when it can have the most impact.

These higher thresholds signal clear government recognition of the economic value created by innovative, fast-growing companies. For VCTs, it means a wider opportunity set and the capacity to further back companies where conviction is strongest. For investors, it increases the potential for more diversified and resilient portfolios.

A notable change to VCT income tax relief

One measure that attracted attention was the decision to reduce upfront income tax relief on new VCT subscriptions from 30% to 20%, effective 6 April 2026.

Although not widely anticipated, changes to tax reliefs are never completely off the table. The VCT industry has seen adjustments before: relief was 20% more than twenty years ago, rose to 40% in 2004, and was set at 30% from the 2006–07 tax year

Importantly, the current 30% rate remains in place until April 2026, giving investors a defined window.

A busy year ahead?

Since the Budget announcements, VCT managers across the industry have already reported a marked increase in applications. With a limited period before the tax relief reduces, it is reasonable to expect a busier-than-usual fundraising season.

Why choosing the right VCT still matters

Despite the time-limited nature of the current relief, rushing into a VCT solely to secure 30% relief is rarely wise. VCTs invest in smaller, early-stage businesses, and thoughtful selection remains essential. Investors may wish to look for:

• A well-diversified portfolio
• A clear investment strategy
• A track record of supporting companies to scale
• A manager with strong experience in sourcing and developing high-potential businesses

The Triple Point Venture VCT, for example, invests in more than 50 companies across 20 sectors. Its focus on business-to-business (B2B) companies ensures exposure to businesses that have historically been attractive acquisition targets for larger competitors. Where a portfolio company is sold at a profit, this can be returned to investors through tax-free dividends – although dividends are not guaranteed, and capital is at risk.

Invest with conviction, not haste

Industry commentators expect increased demand for VCTs in the months leading up to April 2026. But while tax relief is an important component of VCT investing, it should complement – not replace – the selection of a well-managed product that aligns with your long-term objectives.

If you plan to invest before the new relief takes effect, aim to choose a VCT you would still be comfortable holding several years from now.

Important information

This article is an advertisement for the purposes of the Prospectus Regulation Rules and is not the prospectus. Potential investors should refer to the information within the Prospectus, which is available via the website, and must only subscribe for, or purchase, shares based on information contained within it.

The Triple Point Venture VCT invests in smaller companies, which can involve a higher degree of risk than investing in companies listed on an exchange. Investors’ capital is at risk and dividends are not guaranteed. Past performance and forecasts are not a reliable indicator of future performance.

Tax treatment depends on the individual circumstances of each investor and is subject to change. Tax reliefs depend on the VCT maintaining its qualifying status.