In brief: a temporary breach of EU law by the UK government could (in theory) negate the attractive tax reliefs for EMI schemes. In practice, this concern only arises for EMI schemes breaching generous financial thresholds, and the average EMI scheme will not be affected. What’s...
We’ve published a helpful checklist to set out some key steps to getting your share plan right. Step 1 - It's all about planning (see our previous blog "Your share plan - get the first step right"). Step 2 - Working how much to give away under...
There’s been plenty of noise in the last week or so about the fact that EU state aid permission relating to Enterprise Management Incentive ("EMI") options has not been renewed.If you assume the worst, this means that any EMI options granted after 11.00pm on Friday...
Author: Nigel Mason Performance targets are a common feature of share option awards, granted under plans such as the Enterprise Management Incentive Plan (EMI) but are they really necessary? That might be a controversial question, especially for companies in sectors with a strong culture of performance...
As we approach the end of the tax year, our Operations Team starts to think about the share plan annual returns that we will prepare and submit for our clients. Since April 2014 HMRC has required all reportable share schemes to be registered online under Employment...
The Court of Appeal has recently overturned a decision by the Employment Appeal Tribunal on age discrimination regarding an employee share plan. The new decision highlights that it may be appropriate for employers to discriminate based on age, but only in certain circumstances. Some share...
Companies wishing to grant Enterprise Management Incentive (“EMI”) options must meet certain requirements. One of these is that all of an EMI company’s subsidiary companies must be “qualifying subsidiaries”. This usually means that the EMI company must hold more than 50% of the share capital...
Dealing with share plan returns sounds pretty unexciting – until you get a penalty for not doing it properly. We recently did a review of companies that took some or all of their plan administration in house or to a non-specialist on cost grounds: 92.5% of...
We recently published an outline checklist for putting in place an employee share plan. Step one on that checklist is producing a blueprint for the design of the employee share plan. This is important not just to get the design of the employee share plan right...
Some of the details needed in an EMI option agreement are self-explanatory – typically, these details include the number of options granted, the date of grant, and the name of the optionholder. HMRC’s website has a useful summary here: EMI options - terms to be included. It’s...
It is noticeable that, while almost all the tax-advantaged share plans (CSOP, SIP and SAYE) and “Employee Ownership Trust” (EOT) arrangements make reference to “trading activities” (in the context of the scope of appropriate activities of a relevant company), it is only the Enterprise Management...
During April this year, HM Revenue and Customs (“HMRC”) updated their guidance about errors made in online notifications of the grant of an Enterprise Management Incentive (“EMI”) option. It transpires (quite astonishingly in my personal view) that the Employment Related Securities (“ERS”) online system will not...
Flexible share plans Many private companies are keen to implement a flexible employee share scheme and will frequently choose a discretionary scheme such as Enterprise Management Incentives (EMI) or Company Share Option Plan (CSOP). These schemes allow the directors to choose the individuals who will benefit under...
When submitting an Enterprise Management Incentive (EMI) valuation to HMRC for comment, a VAL231 form must be included with your submission. The form includes information like the company name, agent details, proposed values and number of share being offered under option. To date the form...
The need for guiding principles It’s easy to get lost in the complexity of regulations and tax rules around employee share schemes. There are no clearly, readily understandable principles or policy objectives defined in the regulations themselves. Instead, the regulations and tax rules are the result...
