Which Seat You Were in When the Tax Year Turned
A founder asks you, over a coffee they insisted on paying for, what the tax relief looks like if you back them. For a long time that was a one-line answer. You knew the percentage, you knew the cap, and you said it without reaching for your phone.
This month the answer grew a fork in it. The tax year turned on the sixth, and the package that came with it has been read almost everywhere as one thing: a cut.
But it landed as a single cut mostly because one number is easy to report. What actually happened was several different things happening to different people, sorted by where each of them sits at the table.
So before you quote anyone a number this week, it helps to know which of those people is you.
The package that arrived with the new tax year has been read almost everywhere as a single cut. One number fell, the coverage fell with it, and what is left behind is a vague sense that angels lost something on the sixth of April.
The trouble with that reading is that there is no single person called "an angel". There are at least three of them, and the reset sat them in different chairs and taxed each one differently.
The number the headlines chose was the VCT relief rate, down from 30% to 20%. That is a real cut, and a large one. For most people reading this, it is also a cut to a relief they have never once claimed.
The direct angel, the one writing SEIS and EIS cheques into companies they actually meet, did not see their own reliefs move at all.
SEIS is still 50% on up to £200,000 a year. EIS is still 30% on up to £1m. The percentages you quote a founder are the ones you quoted in March.
The part that matters sits further down the page, where nobody was looking.
Seat one, the first cheque. The limits on the companies you can claim against have roughly doubled. A qualifying company can now raise £10m a year instead of £5m, up to £24m across its lifetime, and hold £30m of gross assets before the door shuts rather than £15m.
That reads like plumbing until you hold it against the deck on your desk. A company you would once have waved off as too big for EIS may have just become eligible again. The relief itself is unchanged; what grew is the range of companies it now reaches.
Seat two, the exit. Business Asset Disposal Relief, the rate you pay when you finally take money back out, is now 18%. A year ago it was 14%. The year before that, 10%.
The tax on a good outcome has nearly doubled in two budgets, and almost none of the coverage was about it. If you are weighing a realisation this year, a secondary, a buyback, a trade sale, the number that moved most is the one on the way out.
Seat three, the carry. If you run a syndicate and take a slice of the upside, that slice stopped being a capital gain this month.
Carried interest now sits inside the income-tax framework. For carry that qualifies, 72.5% of it is taxed as income, with "qualifying" tied to holding the investments the better part of four years. The fund manager's favourite line on the upside just joined everyone else's payslip.
Which leaves the number the headlines actually led on. If the VCT cut is not the direct angel's relief, does it reach them at all?
It does, sideways, through the cap table. VCTs are not your competitors; they are your co-investors. They are the institutional half of the Series A that takes your seed company up a level, the cheque that fills out the round you started.
A relief worth 20% instead of 30% raises less from its backers and spends what it raises more carefully. The squeeze never shows up on your tax return. It shows up a year later, in a round that is harder to fill.
The number that never touched your tax return is sitting on the cap tables you share.
So the package was not a retreat from angel investing, whatever the one-number version suggested. For the first-cheque writer it rearranged the furniture: more companies within reach, a dearer way out, and a slow squeeze arriving through the people who co-invest alongside you.
None of that fits in a headline, which is what headlines are for. The useful version takes a minute longer: work out which of the three seats you were in when the year turned, before you quote a founder a relief, mark a position, or model your own carry.
A single number is easy to print. Which number is actually yours takes the extra minute, and it is the minute that pays.
The company-side limits just doubled. From this month an EIS or VCT-backed company can raise £10m a year and £24m over its lifetime, and hold £30m of gross assets, far later and larger than the old £5m and £15m.
What to watch through 2026 is where relief-backed money settles now that the rules let it follow companies into later, larger rounds, and whether that firms up the rounds you start or thins them.
AI seed rounds are clearing $40m post-money, and the label is doing the lifting
TechCrunch reports that a $10m seed round at a $40m to $45m post-money valuation is now ordinary for an AI company. A cybersecurity founder who raised $5m at $25m in 2024 has watched newer, AI-labelled peers price at nearly double.
Same shape here, just quieter: Beauhurst put AI at over £6bn last year, a record share and more than a third of all UK venture. The label is doing some of the pricing now. Ask whether the work underneath would still command this price with the word peeled off.
Britain's new private-share market opened for business, starting with a board-games maker
PISCES, the FCA-regulated venue for trading shares in private companies, ran its first windows in March. QPLAY, a small board-game maker, traded first on JP Jenkins; days later the London Stock Exchange held its opening auction, a vehicle holding secondary shares in Oxford Science Enterprises.
Forget the board games. A private British company can now print something close to a public price between rounds, the number you guess at when you mark your book. Thin and opaque so far. But the first time one of your own holdings trades this way, your mark stops being a private opinion.
Lucida Medical raised £8.7m for AI that reads prostate scans
The Cambridge company, whose software flags prostate cancer on routine MRI, raised £8.7m on 30 March. It was led by IW Capital, an EIS and SEIS specialist, with XTX Ventures and Macmillan Cancer Support; the money goes toward US regulatory clearance.
What makes this an angel's story, not the NHS's: a lead investor who runs on EIS and SEIS, the kind of raise those reliefs were built for, and AI aimed at a real clinical job with a regulator's mark on it. A company paid to find tumours shows what the label should mean.
When the top-up round has no new lead
The email reads like good news. A founder you backed wants to extend, the existing room is topping up, and your pro-rata is invited. No outside investor is setting the terms this time.
That last part is the one to slow down on. A new lead is the market pricing the company afresh; its absence means the price in front of you is last round's number, held up by people who were there last time and cannot easily afford to mark it down.
None of that is a reason to pass. It is a reason to price the thing yourself rather than inherit the number.
Before the pro-rata goes in: if a stranger met this company cold today, no history and no relationship, would they pay this price? If not, you are funding the story, not the valuation.
Know an investor who skimmed the tax headlines, sighed, and filed them under deal-with-later? Share this issue with them.
ReportTBC HMRC EIS and SEIS annual statistics, first 2024-25 estimates (expected late May)
Tax31 Jul 2026 Self Assessment: second payment on account due
Tax5 Oct 2026 Register for Self Assessment, for first-time 2025-26 filers
Tax31 Jan 2027 Self Assessment return and balancing payment, where EIS and SEIS relief is claimed
The Carry · thecarry.co.ukWorth a screenshot for your diary.
Replies reach the editor directly and are read and answered personally. Which seat were you sitting in when the year turned, and what changed that the coverage missed? The sharpest replies shape what a future issue takes apart.
The short of it, in one line: April's reset didn't change one angel's taxes, it changed three. The first cheque, the exit, and the carry each took a different turn, and which one is yours decides what this spring actually cost you. Five quiet minutes settles it, and then you're back to the good part of the job.
Until the next round.