The Treasury is reviewing Enterprise Management Incentives (EMIs) to assess whether the scheme is being abused by small companies, after the annual cost rose above £100 million.

EMIs were introduced to encourage small businesses to grow by offering tax advantaged share options to employees, which enable companies to recruit and retain staff.

I don't think EMI is being abused. It is costing more because it is being successful," said Malcolm Hurlston, chairman of the Employee Share Ownership Centre (ESOC).

Researcher Ipsos Mori will contact 1,000 employees and employers who have used the scheme over the next month, to determine whether small firms are abusing the system.

EMIs are currently available to employees who work over 25 hours a week for an independent company that has no more than £30 million in assets and is not a major shareholder.

ESOC has estimated that the cost of EMIs could rise to £250 million in 2006/7, due to the popularity of the scheme.