Yesterday’s announcement on the proposed changes to the Enterprise Management Incentive (“EMI”) regime from April 2026 have been welcomed for widening access, but they also raise an important question: what might this mean for EMI valuation practice, and for HMRC Shares and Assets Valuation (“SAV”)?
EMI has traditionally been a relatively simple space. The eligibility requirements — including the need for the company to be an independent trading company not under the control of another company — naturally limited the regime to early-stage businesses with straightforward structures. Valuations tended to involve minority ordinary shares, conservative assumptions and uncomplicated modelling. This made the process manageable for SAV, who could agree valuations without extensive review.
The latest changes potentially shift the landscape. Higher limits and broader eligibility mean EMI may now capture many later-stage, investor-backed businesses. These remain eligible so long as they are not subsidiaries, but their capital structures are often far more involved: multiple share classes, preference rights, liquidation waterfalls and much clearer growth expectations. Inevitably, valuation work for these companies leans toward more sophisticated, future-focused approaches.
This raises the real point of uncertainty: How will SAV respond as valuations become more complex and as the number of valuation submissions potentially increases? SAV has, for years, demonstrably taken a pragmatic approach to EMI valuations. As they potentially shift from relatively simple open-market-value assessments to growth-based modelling however, the question arises as to whether it is reasonable for the current clearance process to continue in its present form.
Will SAV maintain the same level of pre-grant valuation acceptance? Could reviews become slower or more selective? Might we even see a gradual move away from EMI clearance, echoing the historic withdrawal of the Post-Transaction Valuation Check (“PTVC”) route once its administrative burden outweighed its value? There is no suggestion from HMRC that change is imminent — but the direction of travel in valuation complexity is difficult to ignore.
Against this backdrop, companies may need to plan for more modelling, more documentation and longer lead times. In a world where certainty from SAV could become less predictable, defensibility of assumptions and clarity of methodology will carry even greater weight.
Ultimately, the recent EMI changes are positive, but they may also signal a shift in the valuation landscape. Whether SAV adapts, retreats or evolves its approach remains to be seen — but EMI valuations may soon feel very different from the straightforward exercises they once were.