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Important Enterprise Management Incentive (EMI) Announcement

On 4th April 2018 HM Revenue & Customs (HMRC) issued an important but unexpected bulletin regarding the Enterprise Management Incentive (“EMI”) scheme.

The bulletin advises that:

  • EU State Aid approval for the EMI scheme will expire on 6 April 2018.
  • The European Commission has the UK Government’s most recent application for State Aid approval in respect of the scheme.
  • Despite this, approval will not be granted until after 6 April 2018 when the current arrangement will expire.

It must be noted that this does not mean that the EMI scheme is to be withdrawn from 6 April 2018.  The UK Government is working to make sure that the period between expiry of the existing approval and a decision by the EU Commission on a renewed approval is as short as possible.

In the meantime, affected companies are advised that:

  • The tax treatment of a new EMI scheme may not apply where options are granted on or after 7 April 2018, where this is before the new approval is received by the UK government.
  • In the past, the European Commission has back dated State Aid approvals in respect of EMI schemes and it may be the case that this will occur once the latest application is approved.  However, we cannot say for certain that this will definitely apply in this instance.
  • Therefore, it may be worth considering delaying the grant of any EMI options until EU State Aid approval is obtained.

It is important to note that any EMI options granted up to and including Friday 6 April 2018 should not be affected by the expiry of the current approval.  This means that EMI options granted prior to this date will remain to be valid within the scheme.

Should you have any queries regarding the EMI scheme or your tax affairs in general, please contact George Lovell or Gareth Costello on 0161 767 1291 or email glovell@dtegroup.com, gcostello@dtegroup.com.