How Much Does An EMI Scheme Cost In The UK?

An EMI scheme can cost very little in government fees, but the real cost is usually in getting the legal documents, valuation and administration right.

For most startups and growing SMEs, the main budget items are professional fees for the option plan rules, option agreements, HMRC valuation support, board and shareholder approvals, and ongoing filings. HMRC doesn't charge a fee to agree an EMI valuation, and there's usually no Companies House fee just because you grant EMI options.

The slightly tricky part is that no two schemes are exactly the same. A simple scheme for a small team will usually be much cheaper to set up than a scheme with multiple share classes, investor consent rights, leavers, vesting milestones and overseas employees.

How Much Does An EMI Scheme Usually Cost?

It depends, because the cost is driven by how much legal, valuation and admin work your scheme needs.

When you budget for an EMI scheme, it helps to split the cost into three buckets:

• Setup costs: preparing the EMI option plan rules for an employee share option plan, option agreements, board minutes, shareholder approvals and Companies House-related documents if needed.
• Valuation costs: working out the unrestricted and actual market value of the shares, and usually asking HMRC to agree the valuation before you grant options.
• Ongoing costs: tracking vesting, handling leavers, submitting HMRC notifications, filing annual ERS returns and updating your cap table.

The legal fee is usually the largest setup cost. That's because an EMI scheme isn't just a form to fill in. It needs to fit your company, your articles of association, your shareholders agreement, your investor documents and your plan for exits or future funding.

A very early company with one ordinary share class and two option holders will usually be simpler than a venture-backed company with preference shares, drag rights, investor consent matters and a larger team. The second company may need more review time before options are granted.

There are also internal costs to factor in. You may spend time gathering accounts, cap table details, shareholder documents and employee information. If your accounts aren't up to date or your cap table has changed a few times, that can add time to the process.

What Drives The Legal Cost Of Setting Up An EMI Scheme?

The main driver is complexity: the more your scheme needs to be customised, the more work is involved.

Legal setup usually includes checking whether an EMI scheme is available for your company, preparing the core documents, and helping you grant options properly. The Enterprise Management Incentives rules sit within UK tax legislation, but the documents also need to work under company law, contract law and your existing corporate documents.

Costs can increase where you have:

• More than one class of shares, such as ordinary shares and investor preference shares.
• A shareholders agreement with investor consent rights or restrictions on issuing shares or options.
• Articles of association that need updating before options can work properly.
• Options for senior hires with negotiated vesting, acceleration or good leaver terms.
• Consultants or contractors you want to reward, as they may not qualify for EMI in the same way employees can.
• Employees who work partly overseas, which can complicate eligibility and tax treatment.
• A planned funding round, acquisition or restructure coming up soon.

You should also check the EMI limits early. Broadly, for options granted from 6 April 2026, most eligible companies must have gross assets of 120 million pounds or less, fewer than 500 full-time employees, carry on a qualifying trade, and have total unexercised EMI options not exceeding 6 million pounds. Each eligible employee can hold EMI options over shares worth up to 250,000 pounds at grant.

Lower limits can apply in specific cases, including some Northern Ireland companies trading in goods or electricity. Older grants may also have been assessed under the previous limits, which applied on or before 5 April 2026.

If you're close to any of these limits, it's worth getting tailored advice before spending money on documents.

What Does An EMI Valuation Cost?

The HMRC valuation application itself doesn't have a government fee, but you may pay professional fees to prepare the valuation properly.

For EMI, you normally want HMRC Shares and Assets Valuation to agree the share value before you grant the options. This isn't just a box-ticking step. The agreed value helps you set the exercise price and reduces the risk of unexpected tax issues later if HMRC takes a different view of the share value.

A valuation usually considers things like:

• Your latest accounts and management accounts.
• Recent fundraising rounds or share transfers.
• Your cap table and share classes.
• Your revenue, losses, growth rate and commercial prospects.
• Restrictions in your articles of association or shareholders agreement.
• The difference between actual market value and unrestricted market value.

If HMRC agrees the valuation, the agreement is typically valid for 90 days. That means you need to grant the options within that period, unless there has been a material change affecting value. If you miss the window, you may need to refresh the valuation.

Some accountants can help with the valuation, especially if they know your business well. Your legal team may also coordinate the valuation process or review the assumptions to make sure the numbers match the legal documents.

Valuation costs tend to rise where your company has recently raised money, has complex share rights, is pre-revenue but high-growth, or has commercial facts that need careful explanation to HMRC.

Is A Fixed-Fee Legal Setup Better Than Using Templates?

Often, yes - a fixed-fee setup is usually better if you want price certainty and documents that fit your actual company.

A template might look cheaper at the start, but EMI schemes can go wrong in quiet ways. For example, the option terms might conflict with your articles, the leaver provisions might not match your employment contracts, or the board approvals might be missing. You may not notice until an employee leaves, an investor reviews your cap table, or you're preparing for a sale.

Here is how the common options compare:

• Free or low-cost templates: Cheapest upfront, but you need to know what to change, what approvals are needed and how to deal with HMRC notifications. They're risky if your cap table or investor documents aren't very simple.
• Online fixed-fee legal service: You know the fee before you start, and the documents can be tailored to your company. This is often a good fit for startups that want a clean setup without open-ended hourly billing.
• Traditional hourly advice: Useful for complex schemes, overseas issues, significant investor negotiations or unusual share rights. The trade-off is that the final bill can be harder to predict.

With our online legal team, you can get a fixed fee quoted up front, free, before you decide whether to go ahead. That can make budgeting much easier when you're also managing runway, hiring and fundraising.

Templates work best as a starting point, not as a finished legal setup. A lawyer should tailor the documents before you use them, especially where options affect ownership and future funding.

What Documents Do You Need To Set Up An EMI Scheme?

You usually need a set of company approvals, scheme rules, individual option agreements and HMRC records.

The exact documents depend on your company, but an EMI setup commonly includes:

• EMI option plan rules: The main rules for how options are granted, vest under a share vesting agreement, lapse and get exercised.
• Option agreement or grant letter: The option deed or document each option holder signs, setting out their personal grant details.
• Board minutes: Directors approve the scheme, the valuation approach and the grant of options.
• Shareholder approvals: Needed if your articles, shareholders agreement or investor documents require consent.
• HMRC valuation correspondence: The valuation submission and HMRC agreement, if obtained.
• Cap table updates: Showing the fully diluted position after options are granted.
• Exercise documents: Used later when an option holder exercises and becomes a shareholder.

Option Plan Outline

If you're trying to scope the legal work, this outline shows what an EMI option plan usually needs to cover. It isn't a finished legal document, and a lawyer should tailor it before you use it.

1. Purpose And Eligibility: Say who can receive options and confirm EMI eligibility requirements.
2. Grant Process: Set out how the board grants options and what paperwork is needed.
3. Exercise Price: Record how the price is set, usually with reference to the agreed share value.
4. Vesting: Explain when options become exercisable, such as monthly over four years with a one-year cliff.
5. Leavers: Deal with what happens if someone resigns, is dismissed, becomes ill or dies.
6. Exercise Events: Cover exercise during employment, on an exit, or before a lapse date.
7. Restrictions On Shares: Link the option shares to the articles and shareholders agreement.
8. Tax And HMRC Notifications: Set out what information needs to be collected and reported.
9. Company Sale Or Listing: Explain what happens on a sale, takeover or other exit event.
10. Amendments: Say when the company can change the rules and whether consent is needed.

What Are The Ongoing EMI Scheme Costs?

The ongoing costs are usually admin, annual HMRC filings, cap table updates and legal support when something changes.

After you grant EMI options, your work isn't completely finished. You need to keep clear records and meet HMRC deadlines. If you miss a filing or make an error, you may need extra professional help to fix it.

Key ongoing tasks include:

• Registering the scheme: You need to register the EMI scheme through HMRC online services.
• Notifying HMRC of grants: For EMI options granted from 6 April 2024, the notification deadline is 6 July after the end of the tax year in which the options were granted.
• Submitting annual ERS returns: You generally need to file an annual employment related securities return by 6 July after the end of each tax year, even if there has been no activity.
• Tracking vesting and leavers: Your records should show what has vested, what has lapsed and what remains outstanding.
• Updating documents on exercise: When options are exercised, you may need board approvals, share certificates, a register of members update and a Companies House SH01 return for an allotment of shares, usually within one month of allotment.

A Worked Example

Say Priya runs a UK SaaS company with 10 employees. She wants to grant EMI options to three key hires over 8% of the company in total, vesting over four years with a one-year cliff. The company has one class of ordinary shares, no outside investors and clean Companies House records.

Her cost drivers are fairly straightforward: one valuation submission, one set of plan rules, three option agreements, board approval and HMRC notifications. The legal work should be easier to price on a fixed-fee basis.

Now imagine Priya raises investment six months later and creates preference shares. If she waits until then to set up options, the valuation may be more involved, investor consents may be needed, and the option documents may need to interact with more complex articles. The scheme may still be worth doing, but it's likely to take more work.

This is why many companies put the option framework in place early, then make further grants as the team grows.

When Should You Budget For EMI Advice?

You should budget for advice before you promise options to employees or include them in an offer letter.

It's very common to say something like, we'll give you 1% options, before the scheme is actually ready. The problem is that 1% can mean different things. Is it 1% of the current share capital, or 1% on a fully diluted basis? Does it vest? What happens if the employee leaves after 10 months? What if you sell the company before the options have fully vested?

Before you make promises, it's worth confirming:

• Whether your company qualifies for EMI.
• Whether the person qualifies, including working time requirements of at least 25 hours per week or, if less, at least 75% of their working time.
• How much of the company you're willing to reserve for the option pool.
• Whether you need shareholder or investor consent.
• What vesting schedule and leaver rules you want.
• Whether your employment contracts and offer letters describe equity consistently.

You should also budget for advice when you're preparing for a funding round, hiring senior staff, buying or selling a business, or changing your articles of association. These moments can affect your valuation, option pool and consent requirements.

If you already promised options informally, don't panic. Gather the emails, offer letters and cap table notes, then get help to turn the promise into proper documents before the misunderstanding becomes bigger.

Key Takeaways

• An EMI scheme usually has low government fees, but you should budget for legal setup, valuation support and ongoing administration.
• HMRC doesn't charge to agree an EMI valuation, but preparing the valuation properly may involve professional fees.
• Cost depends on complexity, especially your share structure, investor consents, vesting terms, leaver rules and timing around funding rounds.
• A fixed-fee legal setup can be a good middle ground because you get price certainty and documents tailored to your company.
• Key deadlines matter: HMRC grant notifications and annual ERS returns are generally due by 6 July after the relevant tax year.
• Templates can miss important details, so have the documents tailored before you grant options or make promises to employees.

If you'd like help with setting up your EMI option scheme, preparing tailored option documents, coordinating your EMI valuation or checking your employee equity promises, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.