ETASSUM50100 | Enterprise Management Incentives (EMI): Introduction

Schedule 5 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA)

From 6 April 2026, EMI options can be granted by independent trading companies with:

• gross assets not exceeding £120 million or £30 million (ETASSUM52060)

• less than 500 or 250 employees (ETASSUM52070)

• unexercised qualifying options not exceeding £6 million or £3 million (ETASSUM51060)

Options can be granted to an employee over shares with an unrestricted market value (UMV) at the date of grant up to £250,000 (including any amount granted under a Schedule 4 CSOP). There will normally be no income tax or NICs when the options are exercised.

There is no approval process or clearance mechanism for EMI, however there is a requirement on companies to notify HMRC when an option is granted. For options granted on or after 6 April 2024 the notification of the grant must be notified by 6 July following the end of the tax year in which the options were granted. Prior to 6 April 2024 the options granted must be notified within 92 days of the grant. In addition, there is also an annual reporting requirement.

A company can request an advance assurance that it meets the qualifying conditions (see ETASSUM52020)

All references in this guidance are to Schedule 5 ITEPA unless otherwise stated.