EMI schemes ― qualifying conditions for employees

Produced by Tolley in association with

Employment Tax

Guidance

The enterprise management incentive (EMI) scheme is a tax-advantaged share option employee incentive scheme aimed at small entrepreneurial companies that meet certain conditions. It is designed to assist such companies in recruiting and retaining high quality employees.

As the EMI scheme is attractive, there are conditions that must be met by the company as well as the employees. For the conditions that must be met by the company, see the EMI schemes ― qualifying conditions for companies guidance note.

This guidance note considers the conditions that must be met by the employees.

In order to be an eligible employee, there are three different types of condition that have to be met. These relate to:

•
employment status
•
working time
•
material interest

These are considered below.

Employment status

This requirement defines an eligible employee as somebody who is working either for the company running the plan or any one of its qualifying subsidiaries.

This means that EMI cannot be used to reward self-employed consultants, unless they become employees.

However,

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Oliver John

Director at Azets , Employment Tax

Oliver John was previously at Mazars for just more than five years where he provided tax and share valuation advice to a range of businesses with regards to share transactions. In his role as director at Azets, Oliver will continue to share tax advice with clients over the life of a business, from companies looking to raise capital to shareholders looking to exit.

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