Ducks in a row: Testing the waters on EMI

The Autumn Budget was just over two months ago, yet it already feels like old news.

The immediate reactions have come and gone, and from where we sit as valuers, this is a good moment to stop and take stock. Not a frantic phase, more the stage where you lay everything out on the table and work out what still makes sense when incentivising your employees.

EMI Changes in 2026

From April 2026, three of the four key limits for EMI increase.

The gross assets limit jumps from £30 million to £120 million, the employee headcount rises from 250 to 500, and the total value of EMI options a company can grant doubles from £3 million to £6 million. As a result, many companies that previously grew out of EMI are suddenly back in the game. The additional extension of the maximum exercise period from 10 to 15 years, together with reduced administrative requirements from 2027, makes EMI an even more attractive proposition. The door has finally been prised open for businesses once left with their noses pressed to the glass as others enjoyed EMI schemes.

Click here for our EMI submission guide.

EMI vs CSOP

To put this into context, imagine a private company with 400 employees and gross assets of £80 million. Until now, that business would have been locked out of EMI and pushed towards CSOP or unapproved options instead. Whilst a CSOP can deliver positive outcomes, it has long felt like the lesser product, with reduced design flexibility, constraints on the level of the exercise price, lower individual limits, restrictive timing rules and limited potential tax efficiency. From April 2026, that same company can use EMI again.

If a senior hire receives options over shares worth £60,000 at grant and those shares grow in value to £500,000 on exit, EMI can often result in growth being taxed under the capital gains tax regime (with enhanced eligibility for Business Asset Disposal Relief) rather than to income tax, subject to conditions. CSOP will get you from A to B, but more as a Plan B rather than the intended route. Under CSOP, the outcome can be less predictable, potentially less tax efficient and materially less attractive if the holding conditions are not met. Multiply that difference across a leadership team, and the numbers quickly become material.

Setting the tone

The expansion of EMI changes the landscape, particularly for businesses hiring new people or rethinking how they reward those driving growth. This becomes particularly important when new people join the business. An option grant is like the first handshake. It sets the tone. The number attached to it, and how confidently it is explained, shapes how someone thinks about their future in the company. Once that impression is formed, it is hard to rewrite.

For most high‑performing individuals who can drive the future growth of the business, few incentives make a stronger first impression than a remuneration package that includes options under an EMI scheme.

Valuation readiness

From a valuation perspective, the groundwork matters. Decisions around share rights and growth assumptions flow directly into what employees are offered and how credible that offer feels.

Sitting behind all of this is HMRC’s Shares and Assets Valuation team. SAV offers a voluntary check to agree EMI valuations ahead of grant, subject to full disclosure and no changes prior to grant. SAV are clear that they should only be approached once a company is ready to grant options. That guidance is often taken to mean that valuation thinking should wait. In reality, it means the opposite. The thinking needs to happen early. By the time paperwork reaches SAV, the important decisions should be baked in.

With just two months until April 2026, this is the point to get your ducks neatly in a row. Review whether EMI will be available again, look at any existing CSOP or unapproved options, and think about how EMI might fit back into the reward strategy. From our perspective, the difference between a smooth process and a stressful one is often determined long before options are granted.

Good planning here is like sharpening your tools before you start building. It does not feel urgent, but you notice the difference later. From our perspective, the companies that do this work now will move into April calmly, whereas others are still trying to find the instructions.