Incentivising Staff

13th July 2015

EMI Share Options: the tax advantages.
Enterprise Management Incentives (EMI) are a tax advantaged share option scheme that can be used to provide an incentive to key staff. The key tax advantage of EMI options in most cases is that no income tax or national insurance will be payable on the exercise of the option. The only exception to this will be where the option exercise price is less than the market value of the shares when granted or where a disqualifying event has taken place before exercise. The market value can be agreed at the outset with HMRC, to ensure that no income tax liability will arise.

Tax on sale of the shares will be charged at more favourable 18% or 28% capital gains tax (CGT) rates. If the options/shares have been held for at least 12 months before the sale then the option holder will be eligible for entrepreneurs’ relief which will reduce the CGT tax rate to 10%, even where a shareholder has less than 5% of the total share capital in the company.

If you would like an initial consultation on setting up an EMI option scheme to attract or retain key staff, please call me on 01284 752313.

Blog entry by: Jeanette Hume.



 
Other items in Blogs
 
Victor Courdelle
15th October 2018 If HMRC Can’t Say, Who Can? – Records Required for ‘Cash Accounting for VAT’ Under MTD

Reference to VAT Notices 700/21, 700/22 and 731 suggests that a business using Cash Accounting for VAT under Making Tax Digital will be required to:- Maintain digital accounting records at transaction level: Keep a digital VAT account using Accrual accounting; Cross reference Monies Received and Paid against individual Sales and Purchase invoices within their digital…

Read More »

Thomas Carter
12th October 2018 How to choose a business structure

Are you thinking about setting up a business?  If so, one of the first decisions you will need to make is that of business structure. The main business structures are: sole trader, partnership, limited liability company, and limited liability partnership (LLP). Sole trader – This is the easiest set up, with very little in the way of red…

Read More »

Richard Alecock
11th October 2018 Why a start up business should complete a business plan

A business plan is a written document that describes your business. By committing your thoughts to paper, you can understand your business better and also map specific courses of action that need to be taken to improve your business. It covers objectives, strategies, sales, marketing and financial forecasts. A business plan can help you to:…

Read More »

Richard Alecock
11th October 2018 Making Tax Digital, VAT and newly registered businesses

All VAT registered businesses with a turnover over the current VAT registration threshold of £85,000 will be required to comply with the Making Tax Digital (MTD) record keeping and reporting requirements for VAT periods which start on and after 1st April 2019. Where a business is VAT registered but has turnover under £85,000 at April…

Read More »

Matilda Mawson
5th October 2018 Have you elected not to claim child benefit?

You may wish to consider the implication this could have on your state pension in later life. Following the introduction of the high income child benefit charge in January 2013 many new parents have decided not to make a claim for child benefit as their individual income is well above the threshold to be fully…

Read More »

Victor Courdelle
4th October 2018 Working With Award Winning Software

We are delighted to announce that two of our chosen software providers have just won national recognition in the 2018 Accounting Excellence Software Awards held in London on 20 September: Xero Accounts – Winner – Accountancy Excellence Awards 2018: Small Business Accounting Software of the Year, Practitioners’ Choice. Receipts Bank – Winner – Accounting Excellence…

Read More »