EMI to continue after Brexit transition

HMRC has confirmed that Enterprise Management Incentive (EMI) schemes will continue to be available after 31 December 2020 under UK law.

In its latest Employment Related Securities Bulletin (37), HMRC has confirmed that EMI schemes, which allow some companies to offer employees tax-free share options worth up to £250,000, will continue to be available after the Brexit transition period ends.

Previously, EMI schemes were approved under EU state aid rules and in February HMRC could only confirm that EMI would be recognised until the end of the transition period.

In its latest bulletin, HMRC confirms that the schemes will operate from 1 January 2021 under UK law.

EMI is open to companies with gross assets of £30m or less, and with fewer than 250 full-time equivalent employees that carry on a qualifying trade.

It enables them to offer share options worth up to £250,000 over a three-year period as an incentive. If the shares are bought at the market rate at the time the options were granted, employees pay no income tax or national insurance on the difference between what the shares are worth when acquired compared to the price paid.