The Enterprise Management Incentive (EMI) scheme has long been one of the UK’s most valuable ways to attract and reward key employees.
It allows businesses to align employee interests with those of shareholders and drive long-term company growth by giving them a stake in the business.
However, it has historically been limited to relatively small companies.
From April 2026, new reforms announced in last year’s Autumn Budget will significantly expand access to the scheme – larger and more established businesses might be eligible for the first time, potentially reshaping how they incentivise and retain talent.
For many growing businesses that have previously fallen just outside the eligibility thresholds, these reforms may open the door to a highly tax-efficient way of incentivising key staff.
What are Enterprise Management Incentives (EMIs)?
EMIs are a government-backed employee share option scheme.
They allow companies to grant share options to key employees in a way that closely aligns individual reward with long-term business performance.
Employees can then benefit from the growth in the business over time.
When the statutory conditions are met, EMI schemes can also deliver significant tax advantages compared with other employee share schemes, making them attractive for both employers and employees.
What is changing to EMIs in April 2026?
The upcoming reforms will widen access to EMI schemes by increasing several eligibility thresholds and introducing greater flexibility.
The key changes coming into effect in April 2026 are:
- Larger companies will qualify – The maximum number of employees a qualifying company can have will increase from 250 to 500 full-time equivalent staff.
- Higher asset threshold – The gross asset limit will rise from £30 million to £120 million, opening the scheme to more businesses.
- Increased option value limit – The overall value of shares that can be granted under EMI options will increase from £3 million to £6 million.
- Longer option lifespan – The maximum period during which EMI options can remain unexercised without losing tax benefits will increase from 10 years to 15 years. This change will also apply to existing EMI options.
- Simplified notification requirements – reducing the administrative burden.
Taken together, these changes will make EMI schemes more flexible and accessible to a wider range of companies.
Why are the EMI reforms important for larger companies?
The changes to EMIs reflect the Government’s recognition that employee ownership and incentives are crucial for supporting business growth.
Many scale-ups and growing businesses were previously excluded from the scheme because they exceeded the employee or asset limits.
However, with the new thresholds, thousands of additional companies could qualify.
How should businesses prepare for the EMI changes?
Although the reforms will not take effect until April 2026, businesses should begin reviewing their position now.
Companies that have previously been ineligible for EMI schemes may wish to reassess whether they could qualify under the expanded thresholds.
Businesses with existing EMI schemes should also consider whether their current arrangements could benefit from the extended 15-year option period and higher overall option value limit.
More broadly, companies may wish to think about how EMI schemes fit within their wider ownership, reward and succession planning strategies.
How can we help you with your EMI scheme?
Our Corporate Team advises businesses on the design, implementation and ongoing operation of employee share schemes, including EMI schemes.
We work closely with companies to ensure their incentive arrangements support their commercial objectives while remaining compliant with evolving legislation.
If you need advice on setting up an EMI scheme for your company, contact our Corporate & Commercial Senior Associate, Harriet Jones, at 0203 794 8996 or at harriet.jones@mackrell.com.
