What were the 2025 Budget Announcements for EMI Schemes?
Rachel Reeves Budget sought to increase the scope of the EMI scheme for growth companies, and so the proposal is to expand eligibility criteria:
- Maximum employee headcount is increased from 250 to 500 employees
- Gross Assets threshold of a company or Group of companies is increased from £30 million to £120 million
- The company-wide unexercised options cap has been increased from £3 million to £6 million.
In addition, to enhance the effectiveness of new and existing schemes:
- The maximum exercise period is extended from 10 to 15 years; and
- The extension can be applied retrospectively to existing EMI options that have not expired or been exercised, provided amendments comply with legislation
And finally, an administrative change, in that HMRC notification requirements for EMI grants will be scrapped from April 2027, reducing the compliance burden.
All of these changes are welcome news
Why Do The EMI Changes Matter?
These changes are a game-changer for scale-ups and high-growth businesses. Previously, EMI was primarily geared toward smaller companies. Now, larger private companies can leverage EMI to:
- Attract and retain top talent with competitive, tax-efficient rewards.
- Align employee and employer interests by sharing in the company’s growth
- Stay competitive in a market where equity incentives are increasingly expected.
What Should Employers Do Now?
Firstly, review your current EMI arrangements and consider whether existing contracts might benefit from the extended exercise period? If your scheme is close to its original expiry then you may be able to extend it.
Plan ahead for April 2026. If you’re approaching the old limits, this expansion could unlock further potential for your existing scheme. Do you have employees to incentivise in a tax efficient way, where you may not have previously had EMI available to your company due to size limitations?
And please seek advice early. Updating EMI agreements and ensuring compliance with the revised legislation will be key.
Act Now
The expanded EMI limits represent a significant opportunity to strengthen your talent strategy and reward growth.
Contact our specialist tax team today to:
- Review your current EMI scheme
- Plan for the upcoming changes
- Ensure your business is ready to maximise these new benefits
Our experts break down how EMI schemes work – from eligibility to execution.
Get in touch for dedicated guidance on setting up a bespoke EMI plan that aligns with both your vision and tax strategies and let’s make sure your EMI scheme works harder for you.
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