Changes to Enterprise Management Incentives (EMI) in 2026

EMI schemes are tax-advantaged share option plans designed to help companies attract and retain skilled employees. They allow businesses to grant options (a promise) over shares in employing companies, to selected employees, with flexibility over the number of options, exercise price, and vesting or exercise conditions. 

From 6 April 2026, the government will increase EMI thresholds. Typically, EMI schemes have been available to small and medium-sized enterprises, but the changes will expand the availability of the scheme to much larger employers. There will also be changes with regards to the administration and registration of schemes with HMRC.    

According to the UK Government website, for eligible companies, EMI share options granted on or after 6 April 2026 will be subject to new, expanded limits: 

• The total value of unexercised company share options (from £3 million to £6 million) 
• The maximum permitted value of gross assets of the company or group granting options (from £30 million to £120 million) 
• The number of employees of the business (from 250 to 500)
• The maximum exercise period during which time an EMI share option has to be capable of being exercised (from 10 years to 15 years) 

The existing limits will still apply to options granted before 6 April 2026. The government have specified that the change in the time limit on the exercise period can apply retrospectively to “existing contracts that have not expired or been exercised — provided that these contracts are amended in line with the legislation, the tax advantages will be retained.” 

From 6 April 2027, companies will no longer need to submit a separate notification when granting EMI options. Instead, details will be included in the end-of-year EMI returns for the 2027/2028 tax year. There is a suggestion, in HMRC commentary, that businesses will need to register a “new” EMI scheme and confirm the scheme meets the relevant conditions before submitting end-of-year returns. It is not clear, yet, whether this will apply only to genuinely new schemes, or to pre-existing schemes as well.  

These changes represent a major opportunity for larger employers to use the EMI regime as a means to: 

• Attract top talent with more generous share option schemes 
• Retain key employees through extended holding periods 

In particular, larger employers in the South West may have struggled to fall within the existing limits for both employees (250) and/or gross assets (being below £30m). The doubling of the employee limit to 500 and, in particular, the quadrupling of the gross asset threshold to £120m, represents a significant shift in the type of businesses which can use EMI Share Options. In general, EMI Share Options are the most tax-advantaged of all of the tax-advantaged share schemes available in the UK, due to the value of shares which can be placed under option, and the flexibility of the terms of the scheme. These changes are therefore a welcome boost.  

The suggestion from HMRC that changes can be made retrospectively is a positive step in theory too, but altering the terms of an EMI Agreement should not be done without taking advice, as this often results in options being treated as cancelled. Doing so now would not necessarily be recommended until, at least, formal guidance and legislation has been released.   

At Old Mill, we are no strangers to sudden and unexpected changes to the financial climate. With a wealth of experience working with businesses of all scales and industries, we advise on how you can manage change to your advantage.  

Speak to one of our advisers today if you’d like further advice on the new EMI scheme changes, maximising the benefits, and staying compliant – get in touch.