From tax breaks to talent wars: What HMRC’s annual share scheme report says about share schemes

HMRC’s latest statistics on tax-advantaged employee share schemes reveal record levels of participation, with Enterprise Management Incentives (EMI) continuing to be the most common scheme among start-ups and scale-ups having just celebrated its 25th birthday in July 2025.

Published on 26 June 2025, the report covers the tax years ending 2022 to 2024, highlighting how UK companies are using share schemes to incentivise and retain talent.

Key figures at a glance

• 20,370 UK companies operated a tax-advantaged share scheme in the 2023/24 tax year, up 2% on the previous year.
• EMI remains the dominant choice, with 89% of companies using an EMI scheme.
• Employees benefitted from £1.29 billion in combined Income Tax and National Insurance relief from all schemes, up 18% from 2022/23.
• SAYE (Save As You Earn) overtook EMI for the largest share of total tax relief for the first time, driven by higher participation and market growth.
• The average option value for EMI grants was £12,340, significantly higher than SAYE’s £6,070.

What this means for UK start-ups

The data reinforces what we see in practice working with start-ups: EMI remains the go-to share scheme for those looking to attract and retain key employees, particularly in the run-up to or after funding rounds.

Three takeaways for growing businesses:

1. EMI is still the most popular scheme for high-growth companies
With nearly 9 in 10 companies choosing EMI, it’s clear this remains the preferred structure for start-ups. The higher financial limits (up to £250,000 per employee) make it a flexible tool for rewarding senior team members who are driving growth.

2. Timing impacts potential gains
While SAYE participation increased during the pandemic when exercise prices were lower, EMI schemes also benefit when valuations are lower at grant, offering significant upside for employees when company value grows.

3. More options are being granted than exercised
The data continues to show a significant gap between the number of companies granting options and those where employees are exercising them because schemes are often exit-based. For founders, this is a reminder to consider carefully how schemes will be monetised and to communicate clearly about how and when employees can benefit, ensuring schemes achieve their retention and motivation goals.

Why plan your scheme early

Implementing an EMI scheme early, ideally well before a funding round, can lock in favourable valuations and maximise tax advantages for employees. With participation and tax reliefs at record highs, now is a strong time for start-ups to consider putting a scheme in place or reviewing existing arrangements.

Our employer share schemes team advises founders at every stage of the process, from designing a scheme that aligns with your growth plans to managing valuations, compliance, and ongoing administration.

Unlock the full potential of your share scheme

If you’re considering an employee share scheme, our team can help you design or review a plan that works for your business goals.

For companies that want hassle-free administration without losing tailored legal advice, our Share Plan Management Dashboard blends expert support with secure online access, keeping you compliant and in control.