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Guidance

Enterprise Management Incentives — EMI and EMI 2

Published 28 October 2026

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This publication is available at https://www.gov.uk/government/publications/enterprise-management-incentives-emi-and-enterprise-management-incentives-2-emi2/enterprise-management-incentives-emi-and-emi-2

What are Enterprise Management Incentives and Enterprise Management Incentives 2?

Enterprise Management Incentives (EMI) and Enterprise Management Incentives 2 (EMI2) (previously known as CSOP) are tax-advantaged share schemes. They allow eligible companies to give employees the option to buy shares in the future at an agreed price when the option is granted.

EMI

EMI is designed to help eligible small high-growth businesses recruit and retain employees. Some business activities are excluded to ensure that EMI remains targeted at higher-risk enterprises.

EMI gives those talented employees the opportunity to share in the growth they help create.

EMI2

EMI2 is available to companies of all sizes and in all sectors, so it supports a broader employee population than EMI. Companies can use it alongside EMI, after growing beyond the EMI eligibility limits, or where their business activities mean they do not qualify for EMI.

When are things changing?

From 28 October 2026, the Company Share Option Plan (CSOP) will be known as EMI2. The scheme will retain the CSOP name in legislation.

From April 2027:

  • the individual EMI2 limit will double from £60,000 to £120,000
  • the interaction between EMI and EMI2 will also be removed, allowing the schemes to operate independently of each other
  • the maximum period for exercising EMI2 options whilst retaining tax advantages will increase from 10 years to 15 years

How the schemes work

EMI

EMI give you share options up to the value of £250,000 in a 3-year period. You must work at least 25 hours a week or 75% of your total working time for the company.

You will not have to pay Income Tax or National Insurance if you buy the shares:

  • for at least the market value they had when you were granted the option
  • within either 10 years or 15 years of being offered them — your EMI option agreement will tell you how many years you get

EMI2

Under current rules, EMI2 gives you the option to buy up to £60,000 worth of shares from 6 April 2023 (or £30,000 if the options were granted before 6 April 2023).

If you buy shares between 3 and 10 years after being offered them, you will not pay Income Tax or National Insurance on the difference between what you pay for the shares and what they’re actually worth.

From 6 April 2027, the limit will increase to £120,000, the interaction with EMI will be removed and the maximum period for exercising will increase to 15 years.

For both schemes you may have to pay Capital Gains Tax if you sell the shares.

Check if you’re eligible

EMI

Most companies can offer you EMI if they have both:

  • assets of £120 million or less
  • fewer than 500 full-time employees

On or before 5 April 2026, companies could offer you EMI if they had both:

  • assets of £30 million or less
  • fewer than 250 full-time employees

Employees are eligible if:

  • they are an employee or full-time director of the company granting the options, or of a participating group company
  • they do not have a material interest in the company
  • they meet the working time requirement

EMI2

Companies of any size and in any sector can generally offer EMI2 options.

Employees are eligible if:

  • they are an employee or full-time director of the company granting the options, or of a participating group company
  • they do not have a material interest in the company

Your employer will tell you whether you are eligible to participate. EMI and EMI2 are discretionary schemes, so a company can decide which eligible employees receive options.

Guidance

Employees and businesses should refer to the guidance to ensure they understand eligibility requirements.

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