Q&As

Can an employee or director who has been on furlough or worked less hours due to the coronavirus pandemic (Covid-19) still qualify for preferential enterprise management incentives (EMI) tax treatment on their subsisting EMI share options?

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Published on LexisPSL on 29/06/2020

The following Share Incentives Q&A provides comprehensive and up to date legal information covering:

  • Can an employee or director who has been on furlough or worked less hours due to the coronavirus pandemic (Covid-19) still qualify for preferential enterprise management incentives (EMI) tax treatment on their subsisting EMI share options?

There is an enterprise management incentives (EMI) commitment of working time requirement which must be satisfied by any employee in order to qualify to be granted an EMI share option. An employee is eligible for EMI purposes only if their average amount per week of ‘committed time’ equals or exceeds:

  1. 25 hours a week (regardless of any other economic activity they also undertake), or

  2. if less, 75% of their working time

Once an EMI option has been granted, this committed working time requirement continues to apply, and in addition to this the employee must actually spend a statutory minimum amount of time on the business of the company each tax year otherwise there can be a disqualifying event for EMI purposes in relation the options, which can result in income tax and possibly employee’s and employer’s National Insurance contributions being payable if the EMI options aren’t exercised within the

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