The new tax year has begun: are you ready?

The new tax year started on 6 April. While the world of share schemes didn’t change much overnight, this is still an important time to reflect on your share plans and ensure that you are making the most of the various tax benefits that are available. It also means that you now have less than three months to think about end-of-year reporting to HMRC.

Here are some of the main things that businesses should be doing at this time.

Review your share plans/schemes

When was the last time you reviewed the terms of your existing share plans and/or your scheme rules?

It is important to check that the terms of your plans and rules match what you want the plan to do, and reflect the current state of the business. Plans and rules are often in place for a long period of time, but businesses evolve quickly – and so does the law – so things can easily go out-of-date.

Here are a few of the most important questions to ask:

Are the performance conditions fit for purpose?
Do the performance conditions reflect the current stage of the company’s development?
Are your leaver provisions (or the way they are operated in practice) adequate to take into account recent changes to employment law and the law of unfair dismissal?
Are you fully utilising the tax benefits available to you and your employees?
Are share plans or awards approaching a longstop termination date – often the tenth anniversary of adoption / grant?

Consider the changes to the Enterprise Management Incentive criteria

To qualify for an Enterprise Management Incentive (EMI) scheme, a company must satisfy various criteria, including the types of shares on offer, the structure of the company and the number of employees within the company.

On 6 April 2026 these qualification criteria changed, as follows:

The employee limit increased from fewer than 250 employees to fewer than 500 employees
The value of the company’s gross assets increased from £30 million to £120 million
The limit on the value of options a company can grant under the EMI scheme increased from £3 million to £6 million
The option exercise period increased from 10 years to 15 years

As a result, many more companies may now be eligible for EMI schemes, including those who previously qualified but then outgrew the criteria. Additionally, the increased value of options that a company can grant benefits those companies that already qualify for EMI: they can now grant share options to more employees, and enjoy the tax benefits that follow.

Not only will the option extension period apply to options granted on or after 6 April 2026, but it will also be possible to extend the exercise period of existing options entered into before this date – something to think about if existing EMI options are about to expire.

Prepare for the HMRC reporting deadline

The HMRC notification and annual reporting deadline is fast approaching. The deadline for both is 6 July following the end of the tax year in which the option was granted (for notification) or in which an event occurs (for annual reporting).

HMRC must be notified when you grant a new EMI option to an employee. It is important to note that the scheme must be registered with the PAYE online service first; only then can you to notify HMRC of the grant of the new option. We recommend registering the scheme as soon as possible to prevent any delays to the notification process later on.

In addition to the grant notification, businesses are required to annually report to HMRC to report on events such as:

The grant of non-EMI options
The issue of shares or other securities to employees
When an employee exercises their option
The transfer of securities or shares to employees
Certain other taxable events in relation to employment-related securities
Where no event occurs (a nil-return)

For more information on how to prepare for the reporting deadline including some tips, please see our previous article here.

Summary

To ensure that your business is prepared for the new tax year, you must above all do five things:

Review your plans and/or rules to ensure they are fit for purpose
Consider eligibility for the EMI scheme
Registered your scheme with HMRC
Notify HMRC of any new grants
Submit your annual report to HMRC

Our specialist Employee Share Incentives team is here to help. We have extensive experience in helping businesses navigate all aspects of the process – from reviewing your existing plans, to advising on the creation of new plans, to HMRC reporting. If you would like to discuss your requirements in more detail, don’t hesitate to get in touch with our Employee Share Incentives team.

This article was co-authored by Trainee Ellé Haddow.

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