Why this isn't really a choice
The way this gets written up online, you'd think a founder sits down with two brochures and weighs the merits. That's not how it goes.
EMI is better. It's more generous, more flexible, and the government designed it specifically to help smaller companies compete for people they can't outbid on salary. If you qualify, the conversation is essentially over.
The real question is whether HMRC will let you have it. EMI comes with eligibility conditions on the size of your business, the number of people you employ, the assets you hold and - the one that catches people out - the trade you're actually in. Banking, farming, property development, ship building and the provision of legal services are all excluded activities, among others, regardless of how small or deserving the business is.
So the honest framing is: EMI first, CSOP if you can't.
And check the current limits rather than the ones you remember, because they moved on 6 April 2026 - gross assets from £30m to £120m, the employee cap from 250 to 500, and the company-wide option limit from £3m to £6m. A fair number of businesses that were correctly told "you're too big for EMI" in 2024 are now comfortably inside the test.
Nobody chooses CSOP. They arrive at it, having found the door to EMI politely closed.
What actually separates them
Set aside eligibility for a moment. Where the two schemes genuinely differ:
- How much one person can hold. EMI allows options over shares worth up to £250,000 per employee in a three-year period. CSOP caps it at £60,000. If you're trying to give a key hire a meaningful stake - the sort that changes their thinking - that gap is usually the binding constraint.
- Flexibility. EMI is comfortable with selective grants, bespoke performance conditions and structures shaped around a specific person. CSOP is more prescriptive in how it must operate.
- Who's eligible. EMI restricts by trade, company size (under 500 employees) and gross assets (£120m). CSOP does none of that - which is precisely why it exists, and why big companies use it.
- How long the option lives. EMI options can now run for fifteen years from grant, up from ten. A long runway matters more than founders expect when an exit takes longer than planned.
- Tax on the gain. Both are tax-advantaged and both, properly run, deliver capital gains treatment rather than income tax on the growth. This is the bit people expect to differ, and largely it doesn't.
Notice the pattern: EMI wins on everything except who's allowed through the door.
The awkward middle: outgrowing EMI
There's a scenario worth planning for, because it arrives quietly - though it now arrives a good deal later than it used to.
A company qualifies for EMI, sets up a scheme, grants options, and everything is fine. Then it grows - more employees, bigger balance sheet - and at some point it crosses a line and stops qualifying for new EMI grants. Since April 2026 that line sits at 500 employees and £120m of gross assets, so most growing SMEs have considerably more headroom than the old £30m test allowed.
Options already granted aren't automatically undone by growth, but there are disqualifying events that can affect the tax treatment of live options, and this is precisely the territory where getting it wrong is expensive and quiet. Meanwhile the next hire you want to reward can't be given EMI at all.
That's the usual route into CSOP: not a decision, a transition. It's worth knowing it's coming before it arrives, particularly if you're growing fast and planning to keep granting.
And if neither works
Sometimes the answer to both is no. An excluded trade rules out EMI; a company structure or a recipient who isn't an employee can rule out CSOP too.
At that point you're looking at growth shares or unapproved options - workable, well-understood, less generous. Not a failure, just a different tool. The mistake is assuming the tax-advantaged schemes are the only options and doing nothing when they don't fit.
Frequently asked questions
What is the difference between EMI and CSOP?
Both are UK tax-advantaged share option schemes giving broadly capital gains treatment on the eventual gain. EMI allows up to £250,000 of options per employee and more flexibility, but is restricted by trade, employee numbers (under 500) and gross assets (£120m). CSOP has no trade restrictions and suits larger companies, but caps each employee at £60,000.
Did the EMI limits change in 2026?
Yes. From 6 April 2026 the gross assets limit rose from £30m to £120m, the employee limit from under 250 to under 500, the company-wide option limit from £3m to £6m, and the exercise period from ten to fifteen years. The £250,000 individual limit was unchanged. Companies registered in Northern Ireland trading in goods or electricity keep the old limits.
Which is better, EMI or CSOP?
EMI, in almost every respect - it's more generous and more flexible. The question in practice isn't which is better but whether you qualify for EMI at all. If you do, use it. CSOP is the fallback for companies that can't, usually because of their trade or their size.
Can a company use both EMI and CSOP?
It's possible, and it most often happens as a transition - a company that granted EMI options while it qualified, then grew past the limits and used CSOP for later grants. It needs care, because the interaction of limits and disqualifying events is where the tax treatment of existing options can come unstuck.
What happens if my company outgrows EMI?
Options already granted aren't automatically undone by growth, but you can't make new EMI grants once you stop qualifying, and certain disqualifying events can affect the tax treatment of options already in issue. It's worth reviewing before you cross the line rather than after.
What if I qualify for neither EMI nor CSOP?
Growth shares and unapproved options are the usual alternatives. Both are workable and well understood, with less favourable tax treatment than the approved schemes. The wrong answer is to do nothing - or to promise equity informally, which is typically the most expensive route of all.
Find out which one you can actually have
Eligibility is the first question and it decides everything after it. Silva sets up EMI schemes on a fixed fee, and if you don't qualify we'll tell you straight and talk you through what does work.