EMI Tax Benefits Not Guaranteed, Businesses Warned

The Esop Centre warned today that current tax benefits associated with Enterprise Management Incentive (EMI) options are not guaranteed, following the expiration today of EU State Aid approval.

EU State Aid approval for the EMI scheme now needs to be renewed but HMRC announced on April 4 there would be a lapse period before the European Commission’s decision on a fresh approval is made.

Tax barrister David Pett warned there were dangers in going ahead without a guarantee of approval.

But he went on “If a company needs to grant employee share options before fresh State Aid approval has been received, and such options would otherwise be expected to qualify as EMI share options, careful consideration needs to be given to the terms on which they are granted so that, if necessary, it will be open to the parties to cancel and re-grant such options at a time when they will qualify for the tax reliefs associated with EMI share options”.

Nigel Mason, director of Esop practitioners RM2, was more sanguine. He said: “Delaying EMI option awards is unnecessary as there are many possible remedial steps that could be taken in the unlikely event of the State Aid approval being declined.”

The latest HMRC statistics reveal the scale of the problem created both at corporate and at personal level: 8,610 companies operated EMI share schemes during 2015-2016, while 23,000 employees were granted EMI options.


For more information please contact
Robert Jarvis
0207 239 4971

Notes to editors
The Employee Share Ownership (Esop) Centre is a non-profit membership organisation that promotes broad-based employee share ownership in the UK and abroad.

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