Enterprise Management Incentives

After a scare in April and May of 2018 where the State Aid attached to the tax reliefs surrounding Enterprise Management Incentives (EMI) was essentially not present for a few weeks, EMI is still very much a well-used scheme. This is due to the continuing and growing popularity of share ownership and the generous reliefs offered by the Scheme. Employees benefit as the company grows, but also only pay tax at a rate as low as 10% on the disposal of the shares.

EMI options can be granted over up to £250,000 of shares per employee. This upper limit is calculated against the market value at the date that the options are granted. EMI is only available to small and medium sized companies and has been specifically designed with entrepreneurial companies in mind.

Head of Corporate Tax at Beavis Morgan, says: “With growing companies, EMI schemes are advantageous for all concerned because the amount of tax relief the company would receive when the employee exercises their options would be markedly higher, as the shares would be of higher value when the employee takes ownership of them. Employees also benefit from a potentially significant uplift in value without an initial capital outlay”.

For more information about Enterprise Management Incentives, contact your usual Beavis Morgan Partner.