by Asim Abbas
11 November 2026 
EMI share options: incentivising staff after the April 2026 changes
EMI share options: incentivising staff after the April 2026 changes
Enterprise Management Incentives let qualifying companies give employees share options with valuable tax advantages.
- Company option limit now £6 million
- Gross assets limit £120 million, employees under 500
- Up to £250,000 per employee
- Exercise period up to 15 years
From April 2026, the limits were expanded significantly, so many more growing companies can now use EMI.
This guide explains how EMI works, the new limits and how employees are taxed.
How EMI works
The company grants an employee an option to buy shares at a fixed price in future. If the exercise price is at least the market value at grant, there’s no Income Tax or NI when the option is exercised. When the shares are sold, the gain is subject to Capital Gains Tax, potentially at the Business Asset Disposal Relief rate.
The limits from April 2026
| Limit | Before April 2026 | From April 2026 |
|---|---|---|
| Company options | £3 million | £6 million |
| Gross assets | £30 million | £120 million |
| Employees | Under 250 | Under 500 |
| Maximum exercise period | 10 years | 15 years |
| Per employee | £250,000 | £250,000 |
Capital gains tax calculator
Tax on selling EMI shares.
Who qualifies
- Independent trading companies, not in excluded activities such as property development or finance
- Employees working at least 25 hours a week, or 75% of their working time
- Employees not holding more than 30% of the company
Jade is granted EMI options over shares worth £20,000, with an exercise price of £20,000. Five years later, the company is sold and the shares are worth £220,000. She exercises and sells. No Income Tax is due. Her £200,000 gain qualifies for BADR because the two-year period runs from grant, so she pays 18% after her £3,000 exemption: £35,460.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Valuation and notification
Companies usually agree a valuation with HMRC before granting options. Grants must be notified to HMRC by 6 July after the end of the tax year of grant. From April 2027, a late notification will no longer automatically lose the tax advantages.
Discounted options
If the exercise price is below market value at grant, Income Tax is due on the discount when exercised, and NI if the shares are readily convertible.
Alternatives
Companies that don’t qualify may use a Company Share Option Plan, growth shares or unapproved options. Each has different tax results.
See HMRC’s guidance on EMI, our BADR guide and our tax planning service.
What should I do next?
Activities and size.
With HMRC.
After grant.
Frequently Asked Questions
What are the EMI limits from April 2026?
£6 million company limit, £120 million gross assets and fewer than 500 employees.
How much can one employee hold?
Unexercised EMI options over shares worth up to £250,000.
Is there tax when EMI options are exercised?
Not if the exercise price was at least market value at grant.
Do EMI shares qualify for BADR?
Yes, if held for two years from the option grant date.
When must EMI grants be notified?
By 6 July after the end of the tax year of grant.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Ali Imran
I’m Ali Imran, an accountant at Wingate Accountants. I help sole traders, landlords and directors get their returns filed early and accurately, without the last-minute panic.
