Changes to the EMI Working Time Arrangements

14th Oct 20

The Enterprise Management Incentive (EMI) is a tax-advantaged share option scheme designed for small and medium-sized companies. The use of the EMI can help small growing companies to attract and retain sought-after employees.

The Enterprise Management Incentive allows employees to buy shares free of Income Tax and NICs on the difference between the amount paid for shares when an option is used and the actual value at the time.

Temporary changes to EMI working time arrangements were announced earlier in the year. They will ensure that individuals who are furloughed or who have their working hours reduced below the current statutory working time requirement for EMI as a result of coronavirus (COVID-19) will retain the tax advantages of the scheme. These changes will apply for a limited period and will have effect from 19 March 2020 until 5 April 2021.

The value of shares over which an employee under the EMI scheme may hold options is currently £250,000 in a 3-year period. In addition, the shares must be in an independent trading company that has gross assets not exceeding £30 million, has fewer than 250 employees and operates a ‘qualifying’ trade.

Companies that work in ‘excluded activities’ aren’t allowed to offer EMIs. Excluded activities include:

  • banking
  • farming
  • property development
  • provision of legal services
  • shipbuilding

AccountAbility-Plus can assist you with all aspects of your payroll, call us on 01440 821991 to discuss your requirements.