Interesting nuggets about EMI state aid approval
Businesses and advisors breathed a collective sigh of relief on 16 May 2018, when the EU commission announced in a press release that Enterprise Management Incentive (EMI) had received EU state aid approval.
At the time, no official case note was available, so advisors were left picking through the details of the press release to infer some key aspects of the approval.
Now a little more information is starting to filter through, via the official case note. The full text of decision is not yet available, so we will be looking out for more!
Interesting nuggets of information revealed by the case note include:
- The UK’s submission was only 17 days before the expiry date, for an approval process that previously took a year!
- The approval has only been extended for five years, rather than previous ten. This nevertheless should take us beyond the end of the Brexit transition period, which ends on 31 December 2020, after which tax policy should be a purely UK concern.
- The decision is one “to not raise objections”.
On the last point (the decision “to not raise objections”), this slightly passive aggressive bit of ‘Eurospeak’ is a standard phrase in the context of EU state aid decisions and is the ‘good’ decision we were expecting. EU state aid decisions are summarised using one of 30 standard phrases ranging from the most favourable (“the measures do not constitute state aid”), through unnerving “initiate the formal investigation procedure” and interfering “proposal for appropriate measures”, to the disastrous “negative decision with recovery”. One concern we had was that, even if EMI was approved, further restrictions would be proposed resulting in either a reduction in the size of the relief or a reduction in the number of companies or employees that could qualify. The decision “to not raise objections” means that there should be no surprises when the full text of decision is released, and so EMI should continue as before.