Spring Budget 2023 – Reforms to Company Share Option Plan (CSOP) and Enterprise Management Incentives (EMI)

March 16, 2023

In the Spring budget 2023, the following reform to the CSOP rules and changes to the EMI rules, effective from 6 April 2023, have been announced:

Reform of CSOP

The CSOP rules will be reformed, as previously announced by the government on 23 September 2022, in the following manner:

  • paragraph 6(1) of the CSOP legislation in Schedule 4 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) will be amended to increase the individual share options limit from £30,000 to £60,000
  • new paragraph 6(5) will be introduced in Schedule 4 to allow the Treasury to change the share options limit by regulations
  • the current requirement in paragraph 20 of Schedule 4 for the CSOP eligible shares, where there is more than one class of shares, to be either employee-control shares or open market shares, will be omitted and some consequential amendments will be made.

Changes to EMI

Legislation will be introduced to simplify the process for the grant of EMI Options, in particular:

  • Paragraph 37 of the EMI legislation in Schedule 5 of ITEPA will be amended so that it would no longer be required to provide details of the restrictions on shares under EMI Options in the option agreement
  • Paragraph 44 in Schedule 5 will be amended to remove the requirement for a company to declare that an employee who was granted EMI options has signed a working time declaration (please note that the obligation on the employee to make the declaration remains)
  • Paragraph 57A in Schedule 5 will be amended to remove the penalty for failing to produce a signed working time declaration or to provide a copy to the employee.
  • New provisions will be introduced to allow EMI share options that were granted before 6 April 2023, but not exercised, also to benefit from the changes.

For EMI Options granted after 6 April 2024, the period of notification of the grant of EMI Options will be extended from 92 days from the date of grant to 6 July after the end of the tax year.


The government will launch a call for evidence on SIP and SAYE schemes, to “consider opportunities to improve and simplify the schemes”.

MM&K’s observation

Welcome changes are being made to the CSOP and EMI regimes from 6 April 2023. The extension of the CSOP individual share option limit and the relaxation of the class of shares over which CSOP Options may be granted should now facilitate the wider use of CSOP to provide incentives to employees. The proposed changes to the EMI legislation should relax the administrative burden on the grant of EMI Options for both HMRC and companies.

For more information, please contact JD Ghosh, Stuart James and Paul Norris.

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