Enterprise Management Incentives ("EMI") option schemes are a tax efficient way for small and growing companies to offer shares to employees. EMI options can be a useful way to attract and incentivise key employees.
However, the tax relief associated with EMI options is technically a form of state aid which is given to the companies granting the options. This means the tax relief requires approval from the EU Commission.
The current state aid approval expired on 6 April 2018. Although HMRC applied to renew the state aid approval last year, the EU Commission has not yet granted the renewal. There has been no indication as to when fresh state aid approval might be granted.
This means companies thinking about granting EMI options should consider waiting until EU state aid approval has been renewed to ensure that they receive the full tax benefits intended.
EMI options granted on or before 6 April 2018 will not be affected as the requisite state aid approval was in place at the time.
If you would like more information on EMI options, please get in touch with one of our corporate and technology team who would be happy to help you.
