Enterprise Management Incentive Options are Changing
What is an EMI?
An Enterprise Management Incentive, EMI, is a government-backed initiative designed to provide tax advantages to businesses.
EMIs are a share options scheme that allows businesses to give options to employees in the most tax-efficient way possible.
EMI schemes are a great option for businesses as it provides them with the ability to reward their employees and improve staff recruitment and retention while offsetting costs against the company’s tax bills.
Upcoming changes
Changes in the law will soon take effect to simplify EMI by removing two administrative requirements. As of 6th April 2023, a company will no longer be required to:
- set out the details of any restrictions applying to the shares to be acquired under the EMI option; and
- declare that an employee has signed a working time declaration when they are issued an EMI option (this does not remove the working time requirement itself).
It has also been announced that, from 6 April 2024, the deadline for notifying the grant of an EMI option will be extended from 92 days to 6 July following the end of the tax year in which the EMI option was granted. The government will legislate these changes separately and the effect of this can be studied at the time the legislation is brought forward.
These measures are intended by the government to support small and medium-sized companies to recruit and retain staff by simplifying the process to grant EMI options.
Here to help
If you are considering granting an EMI option to your employees and would like any advice or assistance then please contact our Corporate and Commercial Team at Bradley Haynes Law on 01905 900 919.
Written by Andrew Johnson