TQOTW: EMI Schemes
Is my EMI scheme valid, given the changes announced by HMRC?

A. HMRC had initially advised that EU State Aid approval for the Enterprise Management Incentive (EMI) scheme expired on 6 April 2018.  HMRC had applied to European Commission for fresh approval but, it was not received before 6 April 2018.  Therefore, as of 07 April 2018, any new options which have been granted may not qualify for the associated tax advantages.

Here is a link to HM Revenue and Customs related bulletin:

https://www.gov.uk/government/publications/employment-related-securities-bulletin/employment-related-securities-bulletin-no-27-april-2018

Whilst HMRC has not yet issued any statement, the European Commission has confirmed that it has recently granted the prolongation of EU State Aid for EMI schemes.  Please see the link below for HMRC approval.  The EU commission stated:

“The Commission’s assessment found that the prolongation of the measure is necessary to help UK SMEs attract and retain talented and skilled personnel.  It also found that the measure contains a number of safeguards, such as a cap on the value of the share options that can be subject to the tax advantage both at the employee and employer level, ensuring that potential distortions to competition are limited.  On this basis, the Commission concluded that the measure is in line with EU State aid rules.  Without prejudice to any provisions of the Withdrawal Agreement, which is under negotiation, this Commission decision only applies until the UK ceases to be a Member State.”

Here is a link to the announcement:

http://europa.eu/rapid/press-release_MEX-18-3803_en.htm

This may give a sign of relief for clients that may have been left in limbo.  However, it is only valid whilst the UK is a member state.  The position may change post-Brexit and if you are thinking of implementing an EMI scheme, you may need to be proactive now.


If you have a tax query, why not contact the Tax Advice Line on 0844 892 2470 to discuss it. Our team of experts have a wealth of experience and can also provide a written consultancy service at £180 per hour plus VAT.

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Tax Adviser
0844 892 2470

Kabita has worked in tax since 2005 and started her career at PwC before moving onto smaller private practices to gain a wider exposure of all areas of tax. Her client base has been mainly high network of individuals and sole traders/directors to prepare tax returns and to provide ad hoc advice to manage their tax affairs in the most tax efficient manner.

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TQOTW: EMI Schemes
TQOTW: Enterprise Investment Scheme