Enterprise Management Incentive (EMI) Scheme
Businesses can grant options worth up to £120,000 at the date of grant for each selected employee and up to £3 million for all employees.
Eligible employees must work a minimum of 25 hours a week or 75 per cent of their working time.
Prior approval from HMRC is not required but HMRC must be notified within 92 days of granting the options.
Corporation tax relief is available for the cost of providing the shares to employees. There is no income tax or NICs to pay when options are granted, nor when they are exercised if the option price is at least the market value of the shares when the options were granted.
To qualify for an EMI scheme a business must, at the date on which an option is granted:
• trade mainly in the UK;
• have fewer than 250 full time-equivalent employees;
• not belong to one of a number of excluded business sectors; and
• be an independent trading company or trading group with less than £30 million in gross assets.
Options must be exercised within ten years.