Enterprise Management Incentives
UK tax-advantaged share-option scheme; April 2026 reform unlocked ~£100m/year for ~1,800 scaleups.
Last refreshed: 22 April 2026 · Appears in 1 active topic
Will EMI reform keep UK scaleups here through Series B, or just reward those already planning to leave?
Timeline for Enterprise Management Incentives
Reformed with quadrupled gross-assets limit and doubled option pool from 6 April 2026
UK Startups and Innovation: EMI reform quadruples the scaleup thresholds- What is the Enterprise Management Incentives scheme?
- EMI is an HMRC-administered tax-advantaged share-option scheme that lets qualifying UK scaleups grant employees options with income-tax and NIC relief on acquisition and capital-gains rates on disposal.
- What changed in the April 2026 EMI reform?
- From 6 April 2026, the gross-assets test rose from £30m to £120m, the employee limit doubled to 500, and the share-option pool doubled to £6m. HM Treasury estimates the reform unlocks ~£100m a year across ~1,800 scaleups.Source: HM Treasury
- Which companies qualify for EMI after the 2026 reform?
- Companies with gross assets up to £120m and up to 500 employees qualify; previously the limits were £30m and 250 employees. The scheme excludes certain sectors such as banking, insurance, and property development.Source: HM Treasury
- How does EMI interact with the VCT tax relief cut?
- Both changes took effect 6 April 2026. EMI reform targets employee retention at scaleups; the VCT relief cut from 30% to 20% reduces the investor pool that funds those same companies, creating a policy tension.Source: event
- What is the new EMI gross assets limit from April 2026?
- The gross-assets ceiling was raised from £30m to £120m, allowing companies to keep using EMI through Series B and C funding rounds.Source: HM Treasury
Background
The April 2026 EMI reform, effective 6 April 2026, quadrupled the gross-assets ceiling from £30m to £120m, doubled the employee limit from 250 to 500, and doubled the share-option pool from £3m to £6m. HM Treasury estimates the changes will unlock roughly £100m a year across approximately 1,800 scaleups. On the same day, EIS and VCT lifetime company investment limits were doubled to £24m .
Enterprise Management Incentives is an HMRC-administered, tax-advantaged employee share-option scheme available to qualifying small and medium companies. Employees granted EMI options receive income-tax and National Insurance Contributions relief on acquisition; gains on disposal attract capital-gains rates rather than income-tax rates. The scheme was introduced to help fast-growing UK companies compete with US and European counterparts for senior technical and commercial talent without paying cash compensation they cannot afford.
The reform addresses a long-standing complaint: scaleups at Series B and C would outgrow the old £30m gross-assets ceiling before their options vested, stripping the retention tool from precisely the companies that needed it most. The new thresholds let companies carry EMI through to later funding rounds. There is, however, a policy tension: the VCT relief cut from 30% to 20%, also effective 6 April 2026 , reduces the investor appetite that funds the same scaleups EMI is now designed to retain.