Your Company May Have Quietly Become Eligible for the UK's Best Employee Tax Scheme Again

 


There's a specific kind of founder frustration that comes from growing successfully out of a good thing. For years, scaling past the Enterprise Management Incentive scheme's size limits meant losing access to one of the most tax-efficient ways to reward employees forced instead onto a clunkier, less generous alternative. As of 6 April 2026, a lot of those companies just quietly became eligible again, and many of them don't yet know it.

The Scheme Companies Grew Out Of

EMI has always been the UK's most attractive tax-advantaged share option plan no income tax or National Insurance due on the grant or exercise of an option, structured correctly, plus access to Business Asset Disposal Relief once shares are eventually sold. The catch was always scale. Once a company crossed £30 million in gross assets or 250 employees, it fell out of scope entirely, regardless of how well it was otherwise performing. Founders in that position were left choosing between the more limited Company Share Option Plan or building bespoke, non-tax-advantaged arrangements instead  both meaningfully less attractive than EMI itself.

What Actually Changed Underneath Everyone

From 6 April 2026, all three of those key limits moved substantially. The gross assets threshold quadrupled, from £30 million to £120 million. The employee headcount limit doubled, from fewer than 250 to fewer than 500. And the total value of shares a company can have under unexercised EMI options doubled too, from £3 million to £6 million, based on unrestricted market value at the time each option is granted. It's being described as the largest expansion of the EMI regime since it was introduced not an incremental tweak, but a genuine reset of who the scheme is built for.

Why This Matters More Than a Simple Rule Change

The practical effect is easy to underestimate. A company that scaled past EMI eligibility three or four years ago, and quietly stopped thinking about the scheme entirely, may now sit comfortably within the new thresholds without having done anything differently the rules simply moved around it. That matters even more in the current climate around UK startup funding, where equity compensation is increasingly expected to stretch further as rounds take longer to close and cash has to be managed more carefully. That's a meaningfully different situation from a brand-new scheme being introduced, because it means dormant eligibility can reappear without anyone flagging it, unless a company actively goes back and checks.

The Extra Detail Nobody's Talking About Yet

Buried within the same reforms is a change that matters for companies further down the road toward an exit: EMI and CSOP contracts granted before 6 April 2028 can now be amended to include a sale of shares on the Private Intermittent Securities and Capital Exchange System as a specified exercise event, while still keeping EMI's favourable tax treatment. For scale-ups exploring newer routes to employee liquidity ahead of a full sale or listing, that's a genuinely new option that didn't exist under the old rules and one that's easy to miss amid the headline changes to the size thresholds.

Options Also Last Longer Now

The maximum exercise period for EMI options is extending from 10 to 15 years, and in many cases this applies retrospectively to options already granted that haven't yet been exercised or lapsed. For companies taking longer than expected to reach an exit increasingly the norm rather than the exception that's five extra years of flexibility before employees and the company have to make a final call.

What to Actually Do About It

The obvious first move is simple: any company that stopped using EMI, or assumed it never qualified, because of the old size limits should revisit its eligibility now rather than assuming the door is still shut. Reforms like this rarely come with a personal notification HMRC isn't going to email every previously excluded company to say the rules changed. The companies that benefit fastest will be the ones that go looking, not the ones waiting to be told.

I came across this angle while reading Entrepreneur Plus Newsletter, and it highlighted something easy to miss: how many companies have likely become eligible for EMI again without realising the rules moved underneath them.

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