HM Treasury has issued a Call for Evidence to review Enterprise Management Incentives (EMI). It follows the Chancellor’s announcement in Budget 2021 whether the EMI scheme should be extended to include more companies.

The goal of the Call for Evidence is to collate views on:

  • Whether the EMI scheme in its current form is fulfilling its policy objective of helping Small and Medium-sized Enterprises (SMEs) recruit and retain employees.
  • Whether companies that are ineligible for the EMI scheme because they have grown beyond the current qualification limits are experiencing difficulties when recruiting and retaining employees.
  • Whether the government should expand the EMI scheme to support high growth companies, and if so, how.
  • Whether other forms of remuneration could provide similar benefits for retention and recruitment as EMI for high-growth companies.

The Call for Evidence closes on 26 May 2021.

The questions that the Call for Evidence is asking to answer are as follows:

  1. If you are a business owner or manager, what is your business activity, when was your company created, what is the value of your company’s gross assets and how many employees do you have?
  2. If you are a business owner have you used EMI? If so, how many employees did you offer it to and why?
  3. If your business does not qualify for EMI, are you using any other tax-advantaged employee share scheme?
  4. Has your company benefitted from other forms of government support, such as R&D tax credits or investment schemes? Where does EMI rank in terms of importance of government support?
  5. If you are responding on behalf of a representative body or think tank, please describe briefly the body, its objectives and its members.
  6. To what extent do you agree/disagree that the EMI scheme is fulfilling its policy objective of helping SMEs recruit employees? 
  7. To what extend do you agree/disagree that the EMI scheme is fulfilling its policy objective of helping SMEs retain employees? 
  8. To what extent do you agree/disagree that the EMI scheme is fulfilling its policy objective of helping SMEs grow and develop? 
  9. In your views, what aspect of the EMI scheme is most valuable in helping SMEs with their recruitment and retention objectives? 
  10. Is there evidence to suggest that high growth companies that are no longer eligible for EMI are finding it difficult to recruit or retain employees? If your answer is yes, what, in your view, causes these difficulties and which jobs and kinds of companies are affected?
  11. If your answer to the previous question is yes, would expanding EMI help with these issues? Please explain your answer. If your answer is yes, do you think that other forms of remuneration or employee benefits could achieve similar results?
  12. Are you aware of the other tax-advantaged employee share scheme offered by the Government (Company Share Option Plan (CSOP), Share Incentive Plan (SIP), Save-As-You-Earn (SAYE))? Do you use or have you previously used any of these schemes? If the answer is no, please explain why.
  13. In your view, do the other tax-advantaged employee share schemes offered by the government (CSOP, SIP, SAYE) provide enough support to high growth companies that no longer qualify for EMI to recruit and retain employees? Please explain your answer.
  14. In your view, how could the government improve the other tax-advantaged employee share schemes to help support high growth companies?
  15. In your view, how do the tax-advantaged employee share schemes offered in the UK compare with other countries?
  16. In your view, should the EMI scheme criteria be extended to include more companies? Please explain your answer. If your answer is yes, which eligibility criteria would you change and why?
  17. In your view, do the current EMI scheme criteria have a distorting effect on companies’ growth insofar as the companies try to remain within the scheme limits? If your answer is yes, could you provide examples or quantitative data to support your views?
  18. In your view could widening the current eligibility criteria to support larger companies affect smaller companies’ ability to recruit and retain employees? Please explain your answer.

Useful guides on this topic

EMI: Enterprise Management Incentives: at a glance (freeview guide)
What is the Enterprise Management Incentive (EMI) scheme?  What are the qualifying conditions?

EMI: Enterprise Management Incentive Scheme (subscriber guide)
What is the Enterprise Management Incentive (EMI) scheme? What's the difference between EMI and an unapproved share scheme?   

Shares, securities & options: Tax compliance
What are the filing requirements for share-based remuneration?  What needs reporting?  When does it need reporting?  What penalties are there for late filing?

Issuing new shares (planning and pitfalls)
A practical guide on how to issue new shares in a company together with a summary of some of the pitfalls if an issue fails to qualify for tax purposes.

External Link

Enterprise Management Incentives: Call for evidence


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