EMI reforms now in force: wider eligibility and longer option periods

Reforms to the Enterprise Management Incentive (EMI) regime took effect from 6 April 2026, bringing welcome changes that should mean favourable EMI tax treatment is open to businesses at later stages in their growth cycle.

In broad terms, the changes:

• increase EMI qualifying limits, bringing more companies within the scope of the regime; and
• allow EMI options to remain exercisable for up to 15 years (rather than 10 years previously).

The changes create opportunities both for companies considering EMI for the first time and (with respect to the increased 15-year period) for businesses with existing EMI arrangements already in place.

Increased limits widen access to EMI

EMI remains one of the UK’s most attractive employee equity incentive regimes, offering significant tax advantages for both employers and employees where the qualifying conditions are met. For 2024, EMI schemes accounted for c.89% of all tax-advantaged schemes in the UK, with almost 18,000 businesses offering EMI schemes to employees.

From 6 April 2026, the key EMI limits for newly-granted options have increased as follows:

For businesses which may previously have fallen outside the qualifying thresholds (and therefore concluded that EMI incentives were not, or were no longer, open to them), this may be a good opportunity to revisit whether EMI options are now available as part of a wider incentivisation strategy.

Due to these changes EMI schemes are likely to become even more attractive for founder-led and growth-stage businesses seeking to:

• recruit and retain key employees;
• align management and investor interests; and
• incentivise employees ahead of a funding round or exit process.

Existing EMI options may be capable of extension to 15 years

The extension of the maximum EMI option period from 10 years to 15 years may be relevant for companies with existing EMI schemes having granted EMI options approaching the end of their original (10-year) option term and not having already lapsed, particularly where:

• an anticipated exit has been delayed;
• longer-term retention remains a priority; or
• the company wishes to preserve flexibility around future liquidity events.

With care, existing EMI options may therefore be capable of amendment to take advantage of the longer 15-year exercise period.

However, any amendments to existing EMI options should be approached carefully. Depending on the structure of the amendment, there may be a risk that changes could affect the tax status of the option or amount to a regrant for tax purposes.

Please contact any member of our tax team should you wish to discuss any of these changes.