Tax Planning
EMI Expansion: How Growing UK Start-ups Can Use Enhanced Share Schemes From April 2026
Budget 2025 expanded EMI thresholds on April 6 2026—this article breaks down what’s changed, who benefits, and how companies and employees can plan share options to maximise rewards.
By NomadicTax Research Team • 5-8 min read • May 15, 2026
## What is EMI and why was it expanded?
The **Enterprise Management Incentive (EMI)** scheme is a UK Employee Share Scheme offering favourable tax treatment to share options granted to employees in qualifying companies. To support scale-ups, Budget 2025 expanded the criteria for companies and employees. These increased limits took effect **6 April 2026**. ([gov.uk](https://www.gov.uk/tax-employee-share-schemes/enterprise-management-incentives-emis?utm_source=openai))
## Key Changes from 6 April 2026
- **Company size thresholds up**: Gross assets limit jumped from **£30 million to £120 million**, and employee headcount increased from **250 to 500**. ([gov.uk](https://www.gov.uk/government/publications/enterprise-management-incentive-scheme-increasing-the-limits?utm_source=openai))
- **Higher option value cap**: Company-level option limit moved from £3 million to **£6 million**. ([gov.uk](https://www.gov.uk/government/publications/enterprise-management-incentive-scheme-increasing-the-limits?utm_source=openai))
- **Extended exercise period**: Maximum period within which share options can be exercised increased from **10 years to 15 years**, applying to new and varied existing agreements if exercised after 6 April. ([gov.uk](https://www.gov.uk/government/publications/enterprise-management-incentive-scheme-increasing-the-limits?utm_source=openai))
## Who Gains Most?
- **Scale-ups** approaching previous size thresholds who were excluded now qualify.
- **Experienced startup employees** who were concerned about tight deadlines now enjoy longer exercise windows—faster entry to taxation benefits.
- **Founders and investors** in larger startups can now offer share options that stay competitive globally.
## Examples
**Scenario 1:** A tech startup with 400 employees and £80 million in assets can now grant EMI options; before, it would have been excluded.
**Scenario 2:** Sarah was given options under an agreement that currently has a 10-year exercise period. The company can amend the exercise period to 15 years—if she exercises after 6 April 2026 and the option hasn’t lapsed.
## Actionable Advice
- Companies: Review your current option agreements. If still valid and not exercised/expired, consider varying them to benefit from the **longer exercise period**.
- Employees: Understand your vesting schedule and whether extending exercise windows affects your personal taxes—especially Inheritance/Capital Gains Treatment.
- HR/Legal Teams: Ensure documentation reflects new thresholds and extended periods; consult with tax advisors to confirm eligibility.
## Common Pitfalls & Considerations
- Options must be exercised **on or after** 6 April 2026 to get the benefit of extended exercise period. Earlier exercise won’t qualify. ([gov.uk](https://www.gov.uk/hmrc-internal-manuals/employee-tax-advantaged-share-scheme-user-manual/etassum50500?utm_source=openai))
- “Specified companies” (certain excluded sectors or conditions) may not be eligible for the expanded thresholds; check the EMI guidance. ([gov.uk](https://www.gov.uk/hmrc-internal-manuals/employee-tax-advantaged-share-scheme-user-manual/etassum50500?utm_source=openai))
- Granting options involves valuation, risk of dilution, possible tax implications if shares are sold—seek specialist advice.
**Category:** Tax Planning
**Published:** Changes in force since 6 April 2026