EMI and share option schemes

Essentials › Accounting › EMI and share option schemes

Strategic financeUnited Kingdom

The problem it solves

Growing companies often compete for talent with larger employers that pay bigger salaries. Share options help, but a poorly designed scheme can leave employees with unexpected tax bills, or the company with disputes when people leave.

What it covers

  • Checking company and employee eligibility
  • Designing vesting, performance conditions, exercise windows and leaver rules
  • Agreeing a share valuation with HMRC
  • Preparing option agreements with your lawyers
  • Registering the scheme and notifying HMRC of grants
  • Annual returns and ongoing administration

Who it is for

Independent UK trading companies that want to attract, keep and motivate key people with equity.

Good to know in the UK

  • Enterprise Management Incentive (EMI) options are the UK’s most tax-efficient employee share scheme.
  • For options granted from 6 April 2026, a company can have up to £6 million of options in issue (previously £3 million), with up to 500 employees and gross assets up to £120 million. Options can be exercised up to 15 years after grant.
  • Some trades are excluded, such as financial activities and property development.

Questions to ask a provider

  • Do you work with lawyers who specialise in share schemes?
  • Will you agree the share valuation with HMRC?
  • Who handles notifications and annual returns?
  • Can options be tied to performance conditions?

This is a plain-English summary for United Kingdom businesses. It is general information, not financial, tax or legal advice, and rules change: facts last checked 8 November 2026. Speak to a qualified adviser about your own situation.