The Autumn budget introduced significant changes to investment and employee option incentives.
From 6 April 2026, the qualifying criteria for the Enterprise Management Incentive (EMI) and Enterprise Investment Scheme (EIS) will expand, widening access to tax‑efficient share incentives for many start‑ups and growing businesses.
Key EMI limits (employee numbers, gross assets, and company option cap) will rise substantially, and current EIS investment asset limits will be doubled.
EMI limits and eligibility are expanding
EMI allows employers to enable employees to acquire shares in their growing company without paying income tax or National Insurance contributions at the point of grant or exercise (and the company benefits from tax advantages as well).
The scheme is designed to attract and motivate key employees to grow the business, but its availability depends on both the employee and the company meeting qualifying conditions.
Currently, EMI options are available to companies with up to 250 employees, already a significant limit. This limit will increase to 500 employees, allowing growing companies to delay the time, expense, and management effort of moving to a Company Share Option Plan (CSOPs) or similar.
At present companies with gross assets of more than £30 million cannot benefit from the scheme, and the overall company limit on the grant of EMI options is £3 million worth of options (at a valuation usually agreed with HMRC).
From 6 April 2026, companies with up to £120 million in gross assets can access the scheme with the overall company limit doubling to £6 million.
A final but important change is that the maximum holding period for EMI options will be extended to 15 years from the current 10 years.
This could be important for scale-up businesses that have issued exit related options and are approaching the previous 10-year limit, when options may otherwise lapse.
Implementing changes after 6th April 2026 could extend the life of a previously lapsing option.
Updates to the Enterprise Investment Scheme
EIS provides tax benefits to individual investors who acquire new shares in a company. This can be a valuable option for companies seeking investment in their early stages from angel or private equity investors.
The changes will allow the annual investment limit to double to £10million in 2026, or £20million for Knowledge-Intensive Companies (as defined in the tax legislation).
The lifetime limit for EIS investment will also double to £24 million, or £40 million for Knowledge-Intensive Companies. The maximum gross assets a qualifying company can have will increase from £15 million pre-investment and £16 million post-investment to £30 million and £35 million respectively.
These are substantial increases and should help start-ups to develop into scale-ups while still attracting capital from angel and private equity investors
Why these changes matter for businesses
The expansion of the qualifying criteria for both the EMI and EIS schemes is a welcome change in the budget, particularly as there were few significant measures for businesses. Whilst this is a niche area and not all companies will benefit, these updates will help many organisations to grow and enable employees to continue sharing in that success.
Companies that have outgrown the EMI scheme often rely on Company Share Option Plans (CSOPs) which have less strict qualifying requirements but are not as tax-advantageous and offer smaller individual awards.
These reforms will enable many of these companies to expand their EMI scheme from 6 April 2026. This is particularly important for businesses aiming to attract and retain talent while continuing to grow through investment and technological development.
Both of these are areas that Lindsays experienced team advise on, so if you have any questions on these changes, please get in touch.
Published 6 January 2026
