Employee Equity Plans / EMI option scheme setup

What do you need to know about the EMI scheme and why is it important for companies in the UK?

The EMI scheme is an officially approved employee share option scheme in the UK that allows small and medium-sized companies to reward key employees with a share in the business with significant tax advantages. As part of the broader emi share scheme ecosystem, it remains one of the most popular tools for long-term employee incentives. Thanks to the emi scheme uk, start-ups and growing businesses can offer attractive incentives without having to pay large salaries or bonuses right away, which is especially valuable in the early stages of development.
This model is not just a bonus, but a tool that helps tie employees' interests to the growth of the company's capital, increase loyalty, reduce staff turnover and encourage employees to work for the long term.

Conditions that must be met to register an EMI scheme

In order for your company to legally and successfully launch an EMI scheme, you must meet a number of criteria:

The company must be independent (not a controlled entity), with assets of up to £30 million and fewer than 250 full-time equivalent employees.

 

The business must conduct qualifying trading activities (many industries are excluded).

 

Options must be granted on ordinary shares of the company that meet the EMI conditions.

 

Employees receiving EMI options must work at least 25 hours per week (or 75% of their working hours) and not own more than 30% of the company's shares at the time of the grant.

 

Without compliance with these conditions, the scheme cannot be officially registered — register EMI scheme.

How we set up an EMI scheme for you (from documents to HMRC approval) ? 

On our Consultant marketplace, we offer full support for setting up an EMI scheme as part of a compliant and tax-efficient emi share scheme:

• Diagnostics and assessment — analysis of the cap table, ownership structure, statutory documents, and verification that the company and employees meet EMI requirements.
  
   
• Preparation of documentation — development of the option agreement, plan rules, shareholder and board documentation, approval of minutes.
  
   
• HMRC assessment — determining the market value of shares, preparing the application, and liaising with HMRC to obtain valuation approval. This step is crucial for maintaining emi scheme tax advantages and preserving qualification.
  
   
• Grant and registration — completing the option grant and notifying HMRC through the ERS system within the required 92-day window.
  
   
• Instructions and support — providing grant letters, employee explanations, a practical guide for managing the option plan, and assistance in events such as exercise, leaver scenarios, exit, or company transactions.
  
   

We handle all legal, tax, and administrative steps — you receive a fully compliant, ready-to-use EMI scheme without hassle.

Benefits of the EMI options scheme for employees and the company

Tax advantages: due to favourable emi scheme tax treatment, when granting and exercising EMI options—provided the strike price meets HMRC requirements—employees do not pay income tax or national insurance. Gains on the sale of shares are taxed as capital gains (CGT), typically at a lower rate.

 

Cost efficiency for the company: instead of increasing salaries or bonuses, a share in the capital can be offered. This is especially useful for start-ups with limited cash flow.

 

Motivation and retention: employees with a real stake in the company are more invested in long-term growth.

 

Flexibility: different vesting schedules, exit conditions, percentages, and roles can be adjusted according to company needs.

 

Common mistakes when setting up an EMI scheme — and how to avoid them ? 

• Incorrect valuation or a strike price set below market value, which can jeopardise EMI qualification and reduce tax benefits.
  
   
• Delay in notifying HMRC about the grant — missing the 92-day deadline may invalidate EMI status.
  
   
• Granting options to individuals who do not meet eligibility requirements, such as insufficient working hours or excessive share ownership.
  
   
• Lack of proper documentation — without written plan rules, agreements, and approved minutes, the emi share scheme may not be considered valid or compliant.
  
   

The emi scheme uk is one of the most effective and flexible ways to build an Employee Equity Plan in the UK. It offers strong fiscal benefits, motivates employees, and helps fast-growing companies attract and retain key people without significant financial outlay.
However, to ensure long-term compliance and tax efficiency, every step — from valuation to HMRC notification — must be handled carefully.

At the Consultant Legal Marketplace, we provide complete guidance and implementation support for EMI schemes, from registration to grant and exit processes. This allows your business to focus on growth while we take care of the legal and technical aspects. If you are seeking a reliable partner to launch an EMI scheme in the UK, our team is ready to assist.