Enterprise Management Incentive Schemes
Here at Hartley Fowler, we offer a range of support with EIS investment tax relief and employee share scheme services.
Incentivising key members of the management team is an important part of any growing business, as is the tax efficient structure of new capital. EMI schemes can help small and medium-sized enterprises to attract and retain skilled employees.
How does an EMI share option scheme work?
- Available to companies with assets under £30m and fewer than 250 employees.
- Employees working 25+ hours/week can receive options worth up to £250k each (total company limit: £3m).
- No income tax or NIC on grant/exercise if options are at market value.
- CGT may apply on sale, with a reduced 10% rate for qualifying gains.
Enterprise Management Incentive Schemes (EMI)
An EMI share option scheme can be an effective mechanism for rewarding key members of staff. Employee share schemes can provide tax benefits to employers and employees. The value of the shares under the EMI share option scheme is tax deductible to employers, potentially enabling them to diminish their tax liability.
With EMI share option schemes, employees are typically only taxed when they sell their shares. This means that they may be able to strategically reduce their Capital Gains Tax liability over time.
We can provide expert advice on:
- EMI share option scheme rules
- Share valuation
- Complying with HMRC annual reporting requirements
- Ongoing enterprise management incentive scheme administration
EIS Investment Tax Relief
Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS) are the tax efficient investment into an enterprise. We can provide support and advice with the following:
- Investment structure
- Qualifying business activities
- Clearance with HMRC
Next Step: Contact us for advice on Enterprise Management Incentive Schemes
The rules around EMI share option schemes and EIS investment tax relief are complex, but we are here to help.
If you need further advice or have any questions about our services, please contact us today. Alternatively, please click here to book a free consultation with an employee share scheme expert.
FAQs
A share scheme lets companies offer employees the chance to own part of the business through shares or options. It’s a great way to motivate and keep talented staff.
Share schemes give employees a stake in the company’s success, which boosts motivation, loyalty, and performance.
Common types include EMI (Enterprise Management Incentives), SIP (Share Incentive Plans), SAYE (Save As You Earn), and unapproved schemes. Each has its own rules and tax benefits.
Share schemes align employees’ interests with the company’s growth, encouraging them to stay and benefit from the company’s success.
An EMI scheme is a tax-efficient way for small businesses to offer share options to employees. Employees can buy shares later and potentially pay less tax when selling.
With schemes like EMI, employees typically don’t pay tax when they get or exercise options. They may pay Capital Gains Tax when they sell shares, but at a lower rate.