EMI Schemes and Share Options Specialist solicitors for EMI schemes and share options in Milton Keynes

We often prepare Enterprise Management Incentive (EMI) schemes which offer tax benefits to companies and employees, while also giving employees a stake in the business.

By offering employees shares in a business or the option to purchase shares if they wish, they can be made to feel a valued part of the organisation and more invested in its success. A well-considered share incentive scheme can help with employee motivation and retention and the recruitment of scarce talent.

At Heald Solicitors in Milton Keynes, our expert EMI schemes and share options solicitors can advise you on the legal implications of setting up a scheme and also draw up the necessary documentation.

Benefits of an EMI scheme

EMI schemes are a tax-efficient way of offering employees a share in the business. EMI schemes are HMRC approved and allow the employee to gain shares at an affordable price with any later capital gain taxed at a fair rate.

An employee with shares in the business is more likely to stay with you longer and to be more invested in your business success.

Schemes are flexible and can be tailored to meet a company’s needs.

EMI scheme eligibility

An EMI scheme can be offered by most independent UK companies but you need to be certain that your company and employees meet the scheme criteria established by HMRC.

General requirements for EMI option schemes include:

• The purpose of the scheme must be to retain or recruit employees and not to avoid tax.
• You may only grant an employee a maximum value of £250,000 in options, based on the unrestricted market value (UMV).
• The most that a company can grant is £3m in unexercised options at any one time, based on UMV.

You must also assess whether your company itself meets the criteria to qualify for EMI. The key criteria are as follows:

• Your company must be independent.
• If your company has any subsidiary companies, they must also qualify for EMI.
• Your gross assets must not exceed £30m at the time of EMI options being granted.
• You must have fewer than 250 full-time employees.
• Your business must have a permanent establishment in the UK.
• Your business must not have a substantial part of its trading activities, or provide services or facilities for other businesses, in specific disqualifying industries.

Employees who work for the business for more than 25 hours each week or for at least 75% of their working hours if they work less than 25 hours there are eligible unless they already own 30% or more of the ordinary share capital.