This is a freeview 'At a glance' guide to the Enterprise Management Incentive (EMI) scheme. 

What is the Enterprise Management Incentive (EMI) scheme?  What are the qualifying conditions? How do you set up an EMI share option scheme?

Subscribers see Enterprise Management Incentive (subscriber guide) for the full version of this note.

At a glance

The Enterprise Management Incentive (EMI) is a tax-advantaged employee share option scheme designed for small and medium-sized companies.

EMI is not to be confused with the Enterprise Investment Scheme (EIS) which is a different scheme offering tax breaks to business investors.

Under EMI a company is able to select employees and give them the option of acquiring shares over a prescribed period, subject to qualifying conditions being met.

The impact on the employee receiving an EMI option is:

Tax-advantaged status can be lost if:

The directors need to be aware of the type of events that may disqualify a scheme as they will be able to avoid them if they know what to watch out for.

An EMI share option scheme works as follows: 

See Enterprise Management Incentive (subscriber guide)

EMI conditions 

Qualifying companies

A company can be quoted or unquoted.

It must:

See Enterprise Management Incentive (subscriber guide)

Employees and qualifying shares

See Enterprise Management Incentive (subscriber guide)


Tax and NIC treatment of an EMI option

See Enterprise Management Incentive (subscriber guide) for further details and examples

Corporate tax deduction

The company will receive a Corporation Tax deduction on the exercise of options granted under an EMI plan, provided that certain conditions are met. See Enterprise Management Incentive (subscriber guide)

The relief is given for the accounting period in which the EMI option is exercised on the difference between the market value of the option shares on the date of exercise and the exercise price.


It is possible to agree a valuation of a company with HMRC for EMI purposes. This can be done by submitting form VAL231 to HMRC's Share and Assets Valuation (SAV) team. The valuations are valid for 90 days and the relevant EMI options should be granted by the end of this period.

HMRC acknowledge that due to COVID-19 there may be a delay in granting EMI options which takes people over the 90-day period. They have confirmed that any new EMI valuation agreement letter issued between 1 March 2020 and 1 December 2022 will be valid for 120 days.

Valuation FAQs answered:

See Enterprise Management Incentive (subscriber guide)


This is designed to show you the main stages in setting up an EMI scheme or plan.

See EMI: checklist

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