Introduction

In order to qualify for the tax breaks that enterprise management incentives (EMI) bring, companies have to meet a number of requirements.

The legislation for qualifying companies is covered in ITEPA 2003, Sch 5, paras 8–23.

For more on the reasons for using EMI schemes, see the Why use an enterprise management incentive (EMI) scheme? guidance note.

The requirements broadly fall into three categories:

1. •

   the size of the company / group and its structure

2. •

   the terms of the option

3. •

   the nature of the company / group trade

HMRC guidance on qualifying companies is at ETASSUM52010 onwards.

A number of changes to EMI limits were announced in Budget 2025. For EMI options granted on or after 6 April 2026, the limit on:

1. •

   company options will be increased from £3m to £6m

2. •

   gross assets will be increased from £30m to £120m

3. •

   the number of employees will be increased from 250 employees to 500 employees

4. •

   the exercise period will be increased from 10 years to 15 years