EU Commission Reinstates UK Enterprise Management Initiative Scheme

Date Added 16.05.18

Early last month the Corporate Services legal team at Tollers advised that the tax advantages of Enterprise Management Incentive (EMI) share option schemes had been suspended indefinitely whilst the UK Government sought EU State Aid approval for continuing the scheme. This lapse was a surprise given the longevity and popularity of the scheme. Our advice at the time of the suspension was to delay the grant of new EMI share options until State Aid had been reinstated and certainty over the tax treatment of EMI share options had returned.

The team are pleased to say that the EU State Aid approval is now back in place and that the tax benefits available under the EMI scheme have been reinstated. The announcement was made by the EU yesterday and can be found here: EU Press Release for EMI Share Options. It was also confirmed on Twitter earlier today EU Commission Competition Department.

The press release advises that “The European Commission has approved under EU State aid rules the prolongation of the UK Enterprise Management Initiative scheme, which reduces the taxation of employee share options for small and medium sized enterprises (SMEs)”. In the Commission’s assessment, it found that the extension of the measure is necessary to help UK SMEs attract and retain talented and skilled personnel. Without prejudice to any provisions of the UK’s withdrawal agreement, the approval will apply until the UK ceases to be a member of the EU.

This is great news for those businesses that were delaying the grant of EMI share options and means that they can now press on with their plans to attract and retain key employees using EMI incentives.

For further information on this issue or employee share options, Talk to Tollers on 01604 258558.

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