EMI Consultation

09 March 2021

In a bid to support UK business growth and employee retention, the government has announced they will be reviewing the HMRC approved Enterprise Management Incentive (“EMI”) share scheme with a view to making EMI accessible to more businesses.

This is great news for businesses keen to retain and attract high calibre employees especially in circumstances where cash bonuses may not be as readily available due to the current economic climate.

EMI will form part of a number of consultations that will be issued on 23 March 2021. The current detail available suggests that EMI schemes will become more readily available to a wider range of businesses rather than the scheme benefits being eroded.

The “call for evidence” being issued on 23 March suggests that certain requirements that prohibit businesses from utilising this valuable tax advantaged share scheme will be relaxed. Currently companies owned by other Corporates fail the requirement and it is hoped this will be relaxed. With EMI being subject to EU constraints the UK’s recent departure from the EU adds flexibility to what can be changed to make sure the scheme has the desired effect on the UK economy and business growth.

EMI offers tax advantages to both the Company and the recipient Employees. In a climate where cash bonuses are less available, now may be a good time to consider alternative share based incentive arrangements that benefit both parties whilst aiding employee engagement.

If you would like to enquire about EMI and share schemes in general, or how AAB could assist you and your business, please contact Katy Thomson.

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