In her 2025 Autumn Budget, the chancellor of the exchequer announced a major overhaul of the Enterprise Management Incentive (EMI) regime in the UK. Rachel Reeves confirmed that the EMI scheme will be expanded from 6 April 2026, giving growing companies far more headroom before they outgrow the rules.

These changes will significantly widen access to one of the most powerful tax-efficient tools for attracting and retaining talent.

How is EMI changing in 2026?

The EMI rules have always had high-potential, early-stage companies in mind. But many businesses have found themselves hitting eligibility limits sooner than they thought, especially when scaling quickly or raising substantial investment.

The government appears to have recognised this, and has announced the following changes:

• Employee limit doubled from 250 to 500.
• Gross assets limit quadrupled from £30m to £120m.
• Company-wide EMI share value cap doubled from £3m to £6m.
• Exercise window extended from 10 years to 15 years.

Why is this a big deal?

EMI is a popular method of providing employee equity in the UK because of its generous tax treatment, primarily the ability to secure the lowest rate of Capital Gains Tax rate on exit in many cases, through the potential to meet the requirements for Business Asset Disposal Relief (BADR).

But as companies scaled, they inevitably hit the gross assets, employee number, or company-wide share value limits, forcing them into less flexible schemes.

These changes mean:

• More companies can continue offering EMI options for longer.
• Scale-ups can align new hires with early employees, rather than switching employees into different incentive plans.
• Equity planning becomes more predictable, even through multiple funding rounds.

At a glance: What is the EMI scheme?

The Enterprise Management Incentive (EMI) is a government-backed share option scheme designed for high-growth UK companies. It allows eligible businesses to grant employees share options with favourable tax treatment.

The key benefits of the EMI scheme

• Employees typically pay no tax on grant, and could pay only 14% CGT on exit, based on the rates in the 25/26 tax year.
• Companies can get a corporation tax deduction when options are exercised.
• EMI options can be targeted at key individuals and tailored with vesting, performance, or exit conditions.

The bigger picture and next steps

This is the most founder-friendly update to EMI in more than a decade. These changes provide greater options for strengthening talent retention during scaling periods, reduce the risk of losing EMI eligibility, and solidify a genuinely tax efficient way to reward employees.

The new regime takes effect in April 2026, but companies planning their equity strategy now should already be thinking about how the expanded thresholds could reshape future grants.