EMI share schemes future secured after Brexit

HMRC has confirmed that Enterprise Management Incentive schemes (EMI) will continue to be available after 31 December 2020, after the Brexit transition period ends.

The department has exercised its managerial discretion to ensure the tax advantages and reliefs available to EMI option holders are protected, pending new legislation.

HM Treasury can extend the protection for a further 12 months if the pandemic has not ended by April 2021.

EMI share options are an attractive and flexible method of rewarding key people in an organisation.

Where the qualifying conditions are met, EMI share options are free of both income tax and employers’ and employees’ National Insurance Contributions (NICs).

EMI share options are popular with small companies seeking to grow who need to recruit and retain important employees who have a strategic part to play.

A company can grant up to £3m worth of shares under EMI at a given time and an employee can generally hold shares under EMI up to the value of £250,000.

Bishop Fleming has experience of setting up and advising on a number of EMI schemes and is able to advise on the best way to incentivise key personnel as well as providing guidance on the most tax-efficient remuneration packages.