Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

National Insurance Contributions definition

What does National Insurance Contributions mean? National Insurance contributions (NICs) are payments made by employees, employers and the self-employed to HMRC—or credited—so individuals build entitlement to the UK State Pension and other contributory social security benefits. NICs are a statutory concept defined primarily in the Social Security Contributions and Benefits Act 1992 (and the Northern Ireland 1992 Act) and related regulations. NICs are distinct from income tax but are usually calculated and reported via PAYE or self assessment. Amounts collected are paid into the National Insurance fund (Great Britain) or the Northern Ireland National Insurance Fund and finance the new State Pension, contributory Employment and Support...

EMI Options (UK): Disqualifying Events, Tax Consequences (Income Tax, NICs, AL), FA 2026 Changes, and Practical Prevention Strategies

Published by a LexisNexis Share Incentives expert

Practice notes

Failing to recognise that a disqualifying event has happened is a leading reason why unexpected income tax, national insurance contributions (NICs) (both employer’s and employee’s) and the apprenticeship levy (AL) can arise when enterprise management incentives (EMI) options are exercised. Consequently, EMI eligibility is not a one‑off snapshot at launch but needs continual monitoring.

This Practice Note considers:

the consequences of a disqualifying event:
- for a market value EMI option, and
- for a discounted EMI option
the disqualifying events:
- relating to the company
- relating to the employees
- relating to varying the option terms
- relating to alterations of share capital
- relating to share conversions
- relating to granting options under company share option plans (CSOPs)
circumstances that do not constitute a disqualifying event (but will stop the company granting any new EMI options)
common errors and misconceptions about disqualifying events
how a disqualifying event can be avoided

What are the consequences of a disqualifying event?

...

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Web page updated on 21/05/2026

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