EMI Scheme Expansion in 2026: A Big Opportunity for Scale-Ups

The Chancellor’s 2025 Budget brought important changes for businesses using Enterprise Management Incentive (EMI) schemes.

With competition for top talent increasing, these updates make EMI options an even more effective tool for attracting, motivating, and retaining key employees.

What Are EMI Schemes?

EMI schemes are a type of share option plan designed for smaller, high-growth companies.

They allow employees to receive equity in the business in a tax-efficient way, helping to incentivise and retain key staff.

Benefits include:

• Tax advantages for employees on gains made from exercising options
• Potential National Insurance savings for employers
• Alignment of employee and shareholder interests

Key Changes to EMI Schemes from 2026

From 6 April 2026, the rules governing EMI schemes will be expanded to give businesses more flexibility and capacity:

• Company grant limit increases from £3 million to £6 million
• Gross assets threshold rises from £30 million to £120 million
• Maximum number of employees eligible increases from 250 to 500
• Maximum holding period for options extends from 10 years to 15 years
• Retrospective application for unexpired EMI contracts is now allowed

These updates allow growing businesses to offer meaningful equity incentives to a broader group of employees, helping to reward performance and foster long-term loyalty.

Why These Changes Matter for Your Business

The expanded EMI limits offer several key advantages for growing businesses:

• Attract and retain talent: With more employees eligible and larger grants possible, companies can reward a wider group of staff and keep key talent motivated.
• Align incentives with performance: Employees with a stake in the company are more likely to be engaged and invested in achieving business goals.
• Tax efficiency: EMI options allow employees to benefit from capital gains tax treatment on profits from share options, rather than higher income tax rates.

For businesses planning new or additional EMI grants, these changes provide a timely opportunity to review existing schemes and optimise incentive strategies before the April 2026 implementation.

Next Steps for Employers

To make the most of the EMI changes in 2026, businesses should take a proactive approach:

1. Review current EMI arrangements – Identify which employees could benefit from new or expanded grants.
2. Plan future grants strategically – Use the higher company and employee limits to reward key staff and encourage retention.
3. Ensure compliance – Work with payroll and accounting teams to manage reporting obligations accurately.
4. Communicate clearly with employees – Explain how EMI options work, the potential financial benefits, and the timeline for exercising options.

How We Can Help

Navigating EMI schemes can be complex, but the rewards for both your business and employees are substantial.

Our team can help you:

• Evaluate your current EMI arrangements and identify opportunities
• Plan and implement grants within the updated 2026 limits
• Ensure full compliance with HMRC reporting requirements
• Advise on tax-efficient strategies for employees and the company

Getting in touch

If you’d like support in preparing your business for the 2026 EMI changes, retaining top talent, and boosting employee engagement, give us a call on 01634 731390.

We can discuss your requirements and help you make the most of this opportunity.

Our Services

To read more about our services please see our related pages below:

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Related blogs

Take a look at our other blogs on the topic of Employee Retention

My employer has offered me share options – What do I need to know?

Why Employees Really Stay at a Firm: Insights from Leading Thinkers

The content in this blog is correct as at 31st December 2025. See terms and conditions.