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EMI Share Option Scheme

Turn Employees into Stakeholders.

The Enterprise Management Incentive (EMI) scheme is a highly tax-efficient, HMRC-approved share option plan designed for small to medium-sized UK companies. It allows employers to grant “options” to key employees, giving them the right to acquire company shares at a fixed price in the future.

By locking in the share price today, employees benefit from the future growth of the company with significantly lower tax liabilities than traditional cash bonuses or unapproved share schemes.

Align employee success with business growth.

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How EMI Helps Your Business & Employees:

Attraction & Retention

Attract top talent without increasing salary costs.
Retain key employees through long-term incentives.
Reward high-performing staff in a tax-efficient way.

Performance Alignment

Align employee and shareholder interests.
Encourage a shared focus on business growth.
Enable employees to benefit from future company value.

Tax Efficiency for Employees

No Income Tax on grant of qualifying options.
Typically no National Insurance contributions on exercise.
Tax-efficient treatment when the exercise price reflects market value at grant.

Capital Gains Advantages

Potentially lower tax rates on qualifying gains.
Gains may be subject to Capital Gains Tax rather than Income Tax.
Eligible employees may benefit from a reduced 10% CGT rate through Business Asset Disposal Relief.

Corporation Tax Relief for Employers

Potential corporation tax relief for the company.
Tax deduction may be available when options are exercised.
Relief is often based on the employee’s gain on exercise.

Eligibility & Limits (2026 Standards):

Company Size

Available to companies with fewer than 500 full-time employees.
Gross assets must not exceed £120 million.
Businesses must meet the qualifying EMI eligibility criteria.

Individual Limits

Employees can hold qualifying EMI options worth up to £250,000.
The limit applies to unexercised options at the date of grant.
Provides significant scope for employee participation and reward.

Working Time

Employees must work at least 25 hours per week.
Alternatively, they must devote 75% of their working time to the company.
The working time requirement must be met to qualify for EMI options.

Independence

The company must operate independently and not be controlled by another business.
It must carry on a qualifying trade to be eligible for EMI.
Certain activities, such as banking and property development, are excluded.

Reporting & Compliance Requirements:

Valuation Agreement

Consider submitting Form VAL231 to HMRC before granting options.
Obtain agreement on the company’s Actual Market Value.
Provides greater certainty and reduces future tax risk.

Grant Notification

Register the EMI scheme with HMRC.
Notify the option grant through the ERS online service.
Ensure all reporting requirements are completed on time.

Annual ERS Returns

Submit an annual ERS return each year.
File a Nil Return if no options were granted or exercised.
Ensure submission by 6 July following the end of the tax year.

Discrepancy Investigation

Conduct internal reviews of your EMI option register.
Identify and address any disqualifying events promptly.
Help prevent unexpected tax liabilities and compliance issues.