{"id":43158,"date":"2025-11-28T15:26:52","date_gmt":"2025-11-28T15:26:52","guid":{"rendered":"https:\/\/www.simplybusiness.co.uk\/?post_type=knowledge&p=43158"},"modified":"2025-11-28T15:26:54","modified_gmt":"2025-11-28T15:26:54","slug":"enterprise-management-incentives","status":"publish","type":"knowledge","link":"https:\/\/www.simplybusiness.co.uk\/knowledge\/business-tax\/enterprise-management-incentives\/","title":{"rendered":"Major tax break on EMIs from 6 April 2026"},"content":{"rendered":"\n

Small business owners will soon see a major tax break, as the chancellor announces increasing the cap on the Enterprise Management Incentives (EMIs) scheme.<\/p>\n\n\n\n

EMIs often have tax benefits for both businesses and employees \u2013 as well as helping with employee retention.<\/p>\n\n\n\n

With the cap on EMIs about to be lifted, here\u2019s what small businesses need to know.<\/p>\n\n\n\n

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What are Enterprise Management Incentives?<\/h2>\n\n\n\n

Enterprise Management Incentives make up a UK government-backed scheme for small businesses, allowing them to offer share options of up to \u00a3250,000 to each employee.<\/p>\n\n\n\n

Tax benefits for employees<\/h3>\n\n\n\n

Businesses grant employees the option to buy shares at a future date for a pre-agreed price \u2013 these then have tax advantages for employees as there\u2019s no income tax or National Insurance to pay.<\/p>\n\n\n\n

If your employees sell a share purchased through the EMI scheme, they\u2019ll only pay capital gains tax<\/a> at the lower rate (18 per cent), rather than the standard rate \u2013 as long as the shares are not sold within 24 months of purchasing.<\/p>\n\n\n\n

Tax benefits for businesses<\/h3>\n\n\n\n

Businesses offering EMIs can then claim corporation tax relief when employees buy share options. This relief is usually equal to the profit the employee makes on the share purchase.<\/p>\n\n\n\n

HMRC then views this profit as an allowable business expense for the company, similar to an employee bonus or salary payment. This tax deduction effectively lowers a company’s taxable profit for the year \u2013 reducing the amount of corporation tax the business has to pay.<\/p>\n<\/div>\n\n\n\n

Lifting the cap on tax incentives from April 2026<\/h2>\n\n\n\n

During the Autumn Budget<\/a>, the chancellor revealed she’s raising the caps on employees and business assets, meaning more businesses will quality for this tax incentive.<\/p>\n\n\n\n

Raising this cap would allow small businesses to offer significantly more valuable, tax-free share options to senior employees. This helps them compete with larger companies to attract and retain top talent without incurring high tax liabilities.<\/p>\n\n\n\n

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Does your business qualify for the EMI scheme?<\/h2>\n\n\n\n

To qualify for the EMI scheme, your business must not:<\/p>\n\n\n\n