Legal Guidance

EMI Share Options on hold?

April 26, 2018

By Corporate Partner, Patrick Billyeald

Enterprise Management Incentive (EMI) share option schemes allow certain companies to grant tax-advantaged share options to their key employees. They were first introduced in 2000 and they have proved popular with many SMEs as a way of recruiting or retaining senior employees and incentivising then to grow the business and enabling them to participate in a tax-efficient way in an ultimate sale.

On 4 April 2018 HMRC announced that EMI share options granted after 6 April 2018 may no longer qualify for the tax advantages because the state aid approval for the scheme issued by the EU Commission expired on 6 April 2018. This was probably the first time that many of us were aware that the scheme even qualified as state aid.

The announcement stated that an application had been made to renew the state aid approval but it had not yet been forthcoming. It transpires that the application was made as late as December 2017. As the original approval took two years from application to receipt of approval it does look as if it was wildly optimistic to expect the new approval to be received before the original approval expired.

As I was in the process of advising on a number of new EMI schemes which would have been affected by this announcement and potentially put on hold indefinitely, I decided to investigate further.

My conclusion was that, at best, there was no legal basis for HMRC’s statement that options granted after 6 April 2018 may not qualify for the tax advantages and, at worst, only the limited tax advantages conferred on employers, but not those conferred on employees, are at risk.


If the HMRC announcement affects you, you may wish to read Patrick’s recent article published in Taxation Magazine here:, or feel free to contact Patrick directly.

DD: +44 (0) 7748 938 268


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