Enterprise Management Incentives (EMI) – what’s changing in 2026?

Robin Hastings

The UK Government announced in its Autumn 2025 Budget that a number of welcome (and overdue) improvements will be introduced to the Enterprise Management Incentive (EMI) scheme legislation.  

What are Enterprise Management Incentive (EMI) schemes? 

EMI schemes have long been widely regarded as the most tax-efficient employee incentive plan available, essentially involving a company granting an option to an eligible employee to acquire shares in the company, usually subject to certain conditions, such as the company being sold, or other key performance criteria being achieved.  

The main benefit of using EMI is that any growth in the value of the shares under option is free of income tax and NICs on exercise and, potentially, Capital Gains Tax Business Asset Disposal Relief could also be available on the sale of the shares. 

Key changes to EMI schemes in 2026: 

With effect from 6 April 2026, the following key changes are due to be implemented: 

• Limit of share option value: The total market value of all unexercised options that a company can grant will double, from £3 million to £6 million.
• Limit of gross assets: The maximum gross asset value for an eligible company will quadruple, from £30 million to £120 million.
• Total employee headcount: The overall cap on number of employees of an eligible company will rise from 250 to 500. 
• Maximum exercise period: The maximum time limit for an option holder to exercise options will be extended from 10 years to 15 years, with retrospective changes also possible for any existing, unexercised EMI options. 
• Notification requirement removal: The current mandatory requirement to notify HMRC about granting any new EMI options will be removed with effect from April 2027. 

What are some of the benefits of the new EMI changes? 

Of course, only time will tell for the effect of these changes, but in general they have been very well received, with some of the main optimism surrounding: 

• Eligibility: More mid-stage and, potentially, larger companies (who may previously have been limited to CSOPs or non-tax-advantaged share option schemes), will now be able to use EMI, where they may have been restricted from doing so previously due to the limits on assets and headcount. 
• Option period: As we often come across, it can take longer than 10 years for a company to grow to the stage where it is ready for an exit, so the extended holding period should certainly help marry up the intended employee incentives with the company’s growth aspirations. 
• Existing options: Even existing EMI options can be retrospectively amended in order to benefit from the new 15-year exercise period. 

How Bermans can help 

The Corporate department at Bermans regularly advise on EMI schemes and other employee incentive schemes (such as CSOPs, LTIPS, non-tax-advantaged share options and growth share issues), so please feel free to get in touch with us if you would like some further information on possibly putting one in place.  

Existing EMI options can also be amended without losing the tax advantages (for example, if they had originally been granted for 10 years) so, if you have an existing scheme in place and would like to amend it, for example, to increase the option period, please contact us. 

Contact Robin Hastings, Partner in our Corporate Team.