Overview of New EMI Scheme Parameters (from 6 April 2026)
At Budget 2025, the UK government enhanced the Enterprise Management Incentives (EMI) scheme to allow more companies and more employees to benefit. Effective from 6 April 2026, the limits have risen as follows:
| Parameter | Old Limit | New Limit |
|---|---|---|
| Maximum value of unexercised options | £3 million | £6 million (gov.uk) |
| Gross assets of company | £30 million | £120 million (gov.uk) |
| Number of employees | fewer than 250 | fewer than 500 (gov.uk) |
| Maximum option exercise period | 10 years | 15 years (applies to new contracts and retrospectively to existing ones, if amended accordingly) (gov.uk) |
What This Means in Practice: Planning Strategies
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Larger Start-ups are now in scope: With higher gross asset ceilings and increased employee thresholds, more scaling companies that were previously excluded can now use EMI to attract talent.
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Sharing options more broadly: Firms can reward senior hires across divisions, broaden participation without losing tax-favourable status.
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Review existing EMI contracts: If there are unexercised options under older contracts, check whether they can be amended to benefit from the longer exercise period.
Tax Benefits and Key Caveats
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Capital Gains Tax reliefs: Gain on exercise and disposal may still qualify for favourable CGT treatment under business asset disposal relief or significant shareholder relief if conditions met.
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Not automatic retrospectivity for all changes: While the exercise period extension can work retrospectively, changes to limits for unexercised options or company size won’t apply to past events or expired contracts.
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Specified companies: Companies registered in Northern Ireland trading in goods or electricity supply have additional rules; check whether they are “specified companies” as the extension periods may not apply fully. (gov.uk)
Action Steps for Founders, Employees, and Advisers
- Identify whether your company now qualifies under new asset and employee thresholds.
- Amend option agreements if needed to extend exercise periods under the new rules.
- Ensure option pricing and vesting schedules are aligned with income tax and NICs rules to avoid unforeseen liabilities.
- For employees: understand how exercising EMI shares under the new thresholds may impact future capital gains and other tax exposure.
- For advisors: include the new changes in induction materials, workshops, and share schemes designs.
Example Scenario
Sarah co-founded a tech company in early 2025. It now has £40 million in gross assets and 320 employees. Under old rules, not eligible for EMI. Under new rules from 6 April 2026, she can grant EMI options to senior staff. If she grants options valued £500,000 unexercised, employees may benefit from EMI-favourable tax treatment and pay CGT on gains instead of income tax.
By understanding and applying these new MQTT limits, UK start-ups and scale-ups can better attract and retain talent through share-based compensation.