Introduction to enterprise management incentives (EMI) schemes
Introduction to enterprise management incentives (EMI) schemes

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

  • Introduction to enterprise management incentives (EMI) schemes
  • Introduction to EMI schemes
  • The law governing EMI options
  • EMI options, EU State aid approval and Brexit
  • Introduction to EMI company eligibility requirements
  • Advance assurance
  • Introduction to EMI employee eligibility requirements
  • Introduction to the requirements relating to the options and the shares
  • Annual compliance
  • Income tax and NICs treatment of EMI options
  • More...

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.

Introduction to EMI schemes

The enterprise management incentives (EMI) scheme is a highly flexible and tax-efficient scheme designed specifically for small/medium-sized businesses. EMI schemes, which were first introduced under the Finance Act 2000, are one of the most popular of the share option schemes available to companies.

Employees selected to participate in an EMI scheme are granted an option to buy shares in a company, paying a fixed price if they do decide to buy the shares (exercise the option). Often, but not necessarily, the exercise price will be equal to the value of the shares at the time the EMI option is granted. There is no obligation for the employee to exercise the option.

While EMI schemes, if implemented correctly, are very tax efficient, the criteria to qualify to grant and be granted EMI

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