Employee Share Scheme rules relaxed

by Aitch, posted in Employee Benefits

The Employee Share Scheme rules have been relaxed to help businesses attract, incentivise and reward employees. The changes, which take effect from 6 April 2027, will increase the value of share options available under the Company Share Option Plan (CSOP), extend exercise periods and provide greater flexibility for companies and employees.

The individual CSOP option limit will double from £60,000 to £120,000. In addition, CSOP options will no longer count towards an individual's Enterprise Management Incentive (EMI) option limit, allowing employees to benefit from both schemes independently.

The maximum exercise period for CSOP options will increase from 10 to 15 years. This extension will also apply retrospectively, allowing existing option agreements to be amended, subject to the legislation, without losing their tax advantages. Moving forward, CSOP will be referred to as EMI2.

Other changes include extending the period for certain tax-advantaged and non-tax-advantaged share options reserved by third parties from 10 to 15 years and extending the EMI exception for companies transitioning to Employee Ownership Trust (EOT) ownership.

The period in which employees can exercise EMI options following a disqualifying event will also increase from 90 to 180 days.

Source:HM Revenue & Customs | 02-11-2026
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Aitch
I'm Aitch, the Founder and CEO of CIGMA Accounting Ltd. As a Chartered Management Accountant and as a CIMA member, I've spent more than 16 years helping businesses, entrepreneurs, landlords, and individuals with tax planning, accounting, and HMRC compliance. As a chartered accountant in London, I'm passionate about making complex tax matters easier to understand and helping clients make confident financial decisions. Over the years, I've advised start-ups, SMEs, established companies, and high-net-worth individuals across a wide range of tax and accounting matters. My expertise includes Corporation Tax, Self-Assessment, Capital Gains Tax, Inheritance Tax planning, R&D tax relief, capital allowances, international tax, and resolving complex HMRC compliance issues. Whether clients need a business accountant, tax accountant, or strategic tax advisor, my focus is always on delivering practical advice that creates long-term value. One of my specialist areas is Making Tax Digital (MTD). I've worked extensively with businesses preparing HMRC's digital reporting requirements, helping them move to cloud accounting, improve financial processes, and adopt technology that makes compliance more efficient. I regularly speak at Making Tax Digital roadshows, industry events, and educational sessions in collaboration with Zoho Books, sharing practical insights into digital accounting, tax legislation, and the future of the profession. Many business owners looking for the best accounting firm in London are not simply searching for an accountant they're looking for trusted advice, responsive support, and long-term value. That's the approach I've taken in building CIGMA Accounting. My team and I work closely with businesses across London and the UK, providing accounting services, tax advisory, bookkeeping, payroll, VAT, company accounts, and strategic tax planning tailored to each client's goals. Through this website, I share practical guidance on UK taxation, Making Tax Digital, HMRC updates, Corporation Tax, Self-Assessment, and business finance. My aim is to provide reliable, straightforward information that helps business owners understand changing regulations, reduce compliance risks, and make informed financial decisions with confidence.
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