Following the announcement in early April that EU approval for Enterprise Management incentives (“EMI”) tax reliefs had been delayed, it was good to hear that the EU commission have finally confirmed the renewal of EU State Aid on 15th May 2018. This is positive news for small and medium sized businesses (“SMEs”) and this announcement will be welcomed by the UK’s SMEs to help attract and retain talented and skilled staff.
EMIs are an HMRC approved employee share scheme that are available to most trading companies and allows share options to be granted to key employees in a tax efficient way, as a reward for their efforts within the business and/or to retain and incentivise key staff.
The EU Commission, as advised in yesterday’s press release, concluded that the UK EMI scheme remains in line with EU state aid rules and has been approved until the UK ceases to be a member of the EU. There was some concern that the rules regarding EMIs would be altered as a result of the application for EU State Aid renewal, however, no amendments have been proposed by the EU Commission and we await Government clarification.
It is unclear at this stage the impact that Brexit will have on EU State Aid funded incentives, but with little over 10 months until 29 March 2019 it is a good time to consider the potential benefits of an EMI scheme and the significant tax advantages it brings.
AAB have significant experience of advising clients on EMI schemes and assisting with the implementation of the scheme for clients. If you require any support or advice regarding tax efficient share incentives please contact Frazer Nicol (firstname.lastname@example.org) or your usual AAB contact.