EMI Schemes: Changes from 6 April 2026

EMI Schemes: Changes from 6 April 2026

Enterprise Management Incentives (EMI) schemes are a well‑established and tax‑efficient share option arrangement, traditionally aimed at small and medium‑sized enterprises (SMEs). From 6 April 2026, the government has expanded the scheme so that larger private companies can also qualify.

What Is an EMI Scheme?

EMI schemes are a type of share option arrangement that allow qualifying companies to grant selected employees the right to acquire shares in the business at a fixed price in the future. Where the scheme is structured correctly, EMI offers significant tax advantages, meaning employees can benefit from capital gains tax treatment rather than income tax on any increase in share value. This makes EMI a popular and effective way to align employee and business interests, particularly in growth-focused companies.

This change means that many growing businesses that were previously excluded from EMI may now be able to use it as part of their employee incentive strategy.

Key EMI Scheme Changes from April 2026

From the start of the 2026/27 tax year, the government has increased the main company‑level limits for EMI:

• The employee limit has increased from fewer than 250 to fewer than 500 employees
• The gross assets limit has increased from £30 million to £120 million
• The maximum total value of unexercised EMI options a company can have in issue has increased from £3 million to £6 million
• The maximum period for exercising EMI options has increased from 10 years to 15 years

In some circumstances, the longer exercise period may also apply to existing EMI options that have not already been exercised or expired.

Employee EMI Limits

The individual employee limit has not changed and remains capped at £250,000 of unexercised EMI options.

What Do the EMI Changes Mean for Businesses?

In simple terms, EMI is now available to a wider range of private companies. Businesses that have grown beyond the previous headcount or asset limits may now qualify, even though they would previously have been excluded.

For business owners, this creates new opportunities to use EMI as a tax‑efficient way of incentivising employees, particularly where cash‑based rewards are less attractive or sustainable.

Companies with existing EMI arrangements may also wish to review their schemes and documentation to ensure they reflect the updated thresholds and the extended exercise period.

How to Apply EMI to Your Business

The expansion of the EMI scheme makes it relevant to a much broader group of businesses. While the underlying conditions and compliance requirements remain important, the increased limits mean that EMI is no longer just for smaller companies.

For growing private businesses looking to reward and retain key employees, EMI may now be a more accessible and valuable option than ever before.

Get Advice on EMI Schemes

For further information on Enterprise Management Incentives (EMI) schemes, or advice on implementing or updating an EMI arrangement, please contact the Corporate team at mlplaw on 0161 926 9969 or corporate@mlplaw.co.uk