EMI—notification of grant of options to HMRC
EMI—notification of grant of options to HMRC

The following Share Incentives guidance note provides comprehensive and up to date legal information covering:

  • EMI—notification of grant of options to HMRC
  • The notification obligation
  • Reasonable excuse
  • Form of notification for options granted prior to 6 April 2014
  • Form of notification for options granted since 6 April 2014
  • Correction of a notice of grant
  • Working time declaration
  • HMRC right of enquiry
  • Annual returns

EMI Review: In the Spring Budget 2020, the government announced that it will review the EMI scheme to ensure that it provides support for high-growth companies to recruit and retain the best talent so they can scale up effectively, and to examine whether more companies should be able to access to the scheme. This suggests that the government may be considering less restrictive eligibility criteria for companies who wish to offer an EMI scheme, therefore potentially increasing the number of companies who qualify to operate EMI schemes. See News Analysis: Spring Budget 2020—Tax analysis.

Enterprise management incentives (EMI) schemes are tax advantageous discretionary share option schemes used widely in the UK. EMI schemes have the potential to provide very generous tax treatment and allow for generous individual awards. However, the EMI legislative requirements are strict and the notification obligation is imperative to ensuring that the EMI tax status is not lost.

This Practice Note details the following:

  1. the notification obligation

  2. the form of notification for options granted prior to 6 April 2014

  3. the form of notification for options granted since 6 April 2014

  4. correction of a notice of grant

  5. working time requirement

  6. HMRC right of inquiry

  7. annual returns

The notification obligation

For a share option (including a replacement option) to be an EMI qualifying option, notice of the option must be

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