Enterprise Management Incentive schemes to continue after Brexit under UK law

In a recent announcement, HMRC have confirmed that Enterprise Management Incentive schemes (EMI) will continue in the UK once the Brexit transition period has ended. The scheme will operate under UK law from 1st January 2021.

EMI is a scheme that allows for some companies to offer their employees a share option up to the value of £250,000 in a 3-year period. For a company to offer this scheme they must have assets of £30 million or less.

Companies that are excluded from offering EMI are businesses within these sectors:

  • Banking
  • Property Development
  • Farming
  • Ship Building
  • Provision of Legal Services

The employee will not have to pay Income Tax or National Insurance if they buy the shares for the market value at the time the shares were offered. If the employee receives a discount on the market value of the shares, they will be subject to pay Income Tax or National Insurance on the difference between what was paid and what the shares were worth when acquired. If the employee decides to later sell the shares, they may be required to pay Capital Gains Tax.

For further information on the Enterprise Management Incentive scheme, visit the government website.