EMI share options – withdrawal of EU approval

You may have read that the UK Government has failed to apply in time for renewal of EU approval for the Enterprise Management Incentives share option scheme. As a result, EU approval is set to lapse on 6th April.

What does this mean for users of EMI? What should you do now?

In its statement issued on 4th April 2018 (see https://www.gov.uk/government/publications/employment-related-securities-bulletin/employment-related-securities-bulletin-no-27-april-2018) HMRC said:

  • share options granted up to and including 6 April 2018 won’t be affected by this lapse of EU approval:
  • options granted in the period from 7 April 2018 until EU State Aid approval is received may not be eligible for the tax advantages;
  • companies may wish to consider delaying the grant of employee share options intended to qualify as EMI share options until fresh EU State Aid approval has been given.

For existing options, therefore, it looks like business as usual, and no immediate action is needed.

If you are planning to grant new options, however, the advice is either:

  • to wait until EU approval is secured, or other clarification comes out from HMRC; or
  • to grant the options by close of business on 6th of April, assuming all the paperwork is ready or can be completed by then, and board approval and so on can be formalised.

If you have any questions about this topic, please contact hello@garbutt-elliott.co.uk