In our briefing on 5 April we highlighted the fact that Enterprise Management Incentives (“EMI”) options would lose their tax approved status from 7 April 2018 and that we would have to wait for EU State Aid approval to be granted before new EMI options could be awarded.
State Aid approval was granted on 15 May 2018 and full details of the decision were only published in the last week. This means that EMI options can be granted on or after 15 May 2018 and qualify for the full tax reliefs for both the employer and the employing company.
HM Revenue & Customs published an Employment Related Securities Bulletin on 31 May which suggests that EMI options granted, perhaps in error, between 7 April and 15 May will also qualify for the advantageous tax treatment. The Bulletin says:
“This decision means that the Enterprise Management Incentives scheme continues to operate in the same way as described in HMRC’s current guidance and practice, for employment related securities options validly granted and exercised as Enterprise Management Incentives share options.
No changes have been made to the scheme."
The continuation of EU State Aid approval for EMI options is great news and a relief for all the companies that use EMI options as a method of recruiting and retaining their key employees.
Companies that grant EMI options have to inform HMRC of the grant within 92 days of the date of grant, otherwise the option loses its tax approve status. Companies also have to file an annual return with HMRC and the deadline for the return is 6 July each year. Failure to file on time can result in a penalty for late filing.
For more information about EMI options, please contact Andrew Evans.
NEWS EMI OPTIONS - IMMEDIATE ACTION REQUIRED