Grant of Enterprise Management Incentive options now on hold


An enterprise management incentive option (EMI option) is a type of employee share option which is a useful remuneration tool for employees in smaller higher-risk trading companies.  It also provides for generous tax treatment for both the employee and the company.

Since the tax benefits are only available to companies with certain qualifying business activities, they involve the provision of state aid. State aid by an EU Member State is unlawful under EU rules unless it falls within an applicable exemption.

The UK’s current EMI authorisation lapsed on 6 April 2018. The Government had sought a renewal of the approval back in 2017 but this has not yet been granted by the European Commission.

HMRC issued a bulletin on 6 April 2018 stating that taxpayers and practitioners should be aware that there will be a period after 6 April 2018 in which there is no approval in place for the grant of new EMI options.

The effects for companies who have implemented or are planning to implement an EMI scheme are as follows:

  • EMI options granted on or before 6 April 2018 will not be affected as valid state aid approval was in place when these were granted; and
  • options granted from 7 April 2018 until state aid approval is renewed may have to be treated as non tax-advantaged (no further detail was given in HMRC’s bulletin)

For companies wishing to implement new EMI options, it is recommended that they consider delaying the grant until fresh state aid approval is secured so that tax-advantaged status is not jeopardised.

It is hoped that the Commission will backdate the approval to apply to any grants of options unwittingly made while approval is not in place, as it has done with other tax reliefs in the past. But there are no guarantees and the matter might not be top of the EU’s agenda, given the current focus on Brexit negotiations.


Anthony Reeves, Associate, Fladgate LLP (

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