Why use an enterprise management incentive (EMI) scheme?

Produced by Tolley in association with

Employment Tax

Guidance

The legislation, primarily in ITEPA 2003, Sch 7, gives employers a strong clue as to the intended benefits of enterprise management incentives (EMI) schemes. It suggests that they should be used to recruit and retain members of staff.

When the legislation was originally introduced in 2000, the belief was that small, fast growing companies, particularly in the IT sector, would need a boost to assist in the retention of staff in a highly competitive market.

Many start-ups struggle to pay market rates and are therefore constantly at risk of losing the employees that they need to develop. As a result, EMI were introduced to help small companies. Today, most smaller companies are able to benefit from EMI and if they are able to do so, almost certainly should take advantage.

A good source of further information is at ETASSUM50000.

Note that although state aid approval for EMI schemes expired on 6 April 2018 and was only renewed by the European Commission on 15 May 2018, EMI options granted in the

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Oliver John

Director at Azets , Employment Tax

Oliver John was previously at Mazars for just more than five years where he provided tax and share valuation advice to a range of businesses with regards to share transactions. In his role as director at Azets, Oliver will continue to share tax advice with clients over the life of a business, from companies looking to raise capital to shareholders looking to exit.

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Why use an enterprise management incentive (EMI) scheme?