The Autumn Budget 2025 announced some important changes to the UK’s Enterprise Management Incentives (EMI) regime.
These changes are set to make one of the most tax-efficient and flexible employee share schemes accessible to more businesses.
Whether your company was previously too large to qualify or you already operate an EMI scheme, these new rules could impact your reward and retention strategy.
What is an EMI scheme?
An EMI is a tax-advantaged share option scheme that is designed to help smaller, high-growth companies recruit and incentivise employees.
Under an EMI scheme, selected employees are granted share options and the right to acquire shares in the company at a fixed price, set at the date of grant.
If the company grows and the value of its shares increases, the employee can exercise their option at that earlier fixed price.
The main tax advantage is that growth in share value is generally subject to Capital Gains Tax and not Income Tax and National Insurance Contributions.
How are EMI schemes changing in April 2026?
The Autumn Budget 2025 brought some of the biggest changes to EMI schemes in years and this included:
What do the EMI changes mean for your business?
The changes open the door for many companies that were not eligible for the scheme before.
Businesses that were previously excluded due to their size or asset thresholds may now qualify.
This includes more capital-intensive or scaling companies that have grown beyond the old limits but still wish to offer equity-based incentives.
For companies already operating EMI schemes, the longer holding period provides greater flexibility in structuring long-term incentives.
The extended 15-year lifespan may be particularly valuable for businesses with longer growth cycles or succession planning on the cards.
How can we support your EMI scheme?
EMI schemes do offer appealing tax advantages, but the legal risks and strict qualifying conditions should not be overlooked.
Errors in structuring or documenting your scheme can put you and your finances at risk.
With the right professional support, you can be sure that your company qualifies for the EMI scheme and has compliant option agreements.
Our expert team can help prepare the legal documentation for your EMI, including joint elections and exercise notices.
We can also review and update existing schemes to reflect the new rules and ensure they are compliant with the Companies House requirements.
The new EMI regime is a valuable opportunity for growing businesses and we want to ensure that your scheme is structured accurately.
If you need further advice on drafting or reviewing employee incentive and share schemes, contact our team today.
