Enterprise Management Incentives: changes coming into effect on 6 April 2026

The Enterprise Management Incentives (EMI) scheme is a government approved share option plan that allows companies to grant employees the right to purchase shares at a fixed price. When implemented effectively, EMI can be a powerful tool for aligning staff with long-term company growth, often delivering substantial tax advantages for both employees and employers.

Changes to EMI from April 2026 bring a huge portion of the UK’s midmarket into EMI territory for the first time. Companies that previously grew out of eligibility, or assumed they were too large now have a genuine opportunity to adopt or reinstate EMI.

The headline change is the expansion of the company size limits:

• gross assets cap quadruples from £30m to £120m;
• employee limit doubles from 250 to 500 fulltime equivalents.

Whether your business is preparing for growth, seeking investment, or planning an eventual exit, EMI can now play a central role in your strategic planning.

EMI can help you to achieve:

• attract high-calibre talent;
• improve retention without increasing salary costs;
• align staff with long-term company success;
• benefit from valuable corporation tax deductions.

The 2026 EMI reforms mark a pivotal moment for companies looking to enhance their people strategy. The UK talent market remains competitive, and employees are increasingly focused on long-term, meaningful reward structures.

Which companies qualify for EMI?

In summary, the company must meet the following conditions when the option is granted:

• it must be UK resident or have a UK branch;
• it must not be a subsidiary, or under the control, of another company (some private equity fund structures can prevent this condition being met);
• its gross assets must not exceed £120 million;
• it must have fewer than 500 full time equivalent employees (part time employees are pro-rated);
• it must carry on a qualifying trade.

Some businesses based in Northern Ireland have lower limits, depending on the nature of their trade; businesses in Northern Ireland should check with their advisors to see if the new limits are available to them.

Who doesn’t qualify for EMI?

Any trade will be a qualifying trade unless a substantial part of it is made up of ‘excluded activities’, for example:

• dealing in land or financial instruments;
• banking;
• insurance;
• hire-purchase financing;
• financial activities (but giving financial advice does not fall within this category);
• leasing or receiving royalties or licence fees in relation to certain intellectual property;
• providing legal or accountancy services;
• certain property-backed trades;
• ship building, coal and steel production.

Broadly similar conditions apply to groups of companies, as well as some additional conditions (e.g. concerning subsidiaries).

How Moore Kingston Smith can help

We work closely with companies to design, implement, and manage EMI schemes that support their commercial objectives. Whether you’re exploring EMI for the first time or revisiting it in light of the 2026 reforms, we can guide you through:

• qualification and eligibility;
• scheme design;
• valuation;
• employee communication;
• ongoing administration.

If you’d like support navigating the new EMI landscape or assessing your eligibility under the revised rules, contact us.