EU endorses EMIs
Enterprise Management Incentives (EMI) have been given long term approval by the European Commission. These popular and flexible plans allow small businesses to recruit and retain highly skilled employees more easily.
EMIs provide a tax break on share options offered by small and medium-sized enterprises (SMEs) to their employees, enabling them to attract staff who would otherwise seek higher salaries elsewhere. The Commission's approval is set to last until 2018 which provides certainty to companies, together with new eligibility criteria which will increase the number of companies currently using the EMI.
Economic secretary to the Treasury Ian Pearson said the move will encourage take-up among high-growth small firms that will play a vital role in driving the UK out of the recession. "This is excellent news for small and medium-sized companies, particularly at a time when their success will be crucial to economic recovery".
The rules for EMI will also be relaxed on whether companies must be based in the UK so that only a 'permanent establishment' in the UK needs to be shown, rather than 'wholly trading' in the UK. This will help UK SMEs with substantial overseas activities to recruit highly skilled UK-based staff and allow UK taxpaying staff of overseas SMEs that have a permanent establishment in the UK to benefit from the scheme.
This change will take effect from 6th April 2010.
Could your company benefit from an EMI? For further information or to talk to a share scheme specialist call us on 020 8949 5522.