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EMI Share Option Deadline To Be Relaxed

Posted 27 Jul 2023 16:29 by

Government has published draft legislation to extend the time limit for notification of the grant of EMI options.  Currently, companies must notify HM Revenue & Customs of an EMI option grant within 92 days of the date of grant.  This limit will be extended for EMI share options granted on or after 6 April 2024.  Instead, companies will need to notify HMRC of an EMI option grant on or before the 6 July following the end of the tax year in which the grant was made.

Welcome change for SMEs

According to HMRC, approximately 45,000 individuals are granted EMI options annually.  This change should result in fewer late notifications and fewer EMI options becoming disqualified.  That will benefit SMEs running EMI share plans, and the employees who have been granted EMI options.

RM2 welcome this change.  It can be clunky and time consuming to register EMI options.  Furthermore, the process currently relies on Royal Mail delivery of an important code allowing access to the EMI registration online system. How twentieth century!   

The deadline still applies at the moment!

Remember though, that the 92 deadline still applies for EMI options granted up till 5 April 2024.  If you don’t notify HMRC within that timeframe, your EMI options will not qualify. 

Proof that government listens?

Incidentally, HMRC published this policy paper on the same day as the HMRC consultation on Employee Ownership Trusts (EOTs).  If you’re dubious about whether government pays attention to consultations, remember that this is only one of three recent changes. These all followed HMRC’s call for evidence/review of EMI back at the Spring Budget 2023.  The first two measures applied from 6 April 2023, and removed the need to set out the details of share restrictions in option agreements and to sign a working time declaration.   A further change increased the Company Share Option Plan (CSOP) individual option grant limit from £30,000 to £60,000.

So, yes, it’s worth responding to those consultations.  The wheels of government turn slowly, but responding to calls for evidence can help oil the machine.

Any questions?

If you’ve got any questions about the upcoming changes to EMI, or how you should be dealing with EMI registration before next April, please don’t hesitate to get in touch on enquiries@rm2.co.uk.