The Chancellor announced new measures to simplify the grant of Enterprise Management Incentive (EMI) options. He also confirmed changes to the number of options that can be granted to Company Share Options Plans (CSOPS) in his Spring 2023 Budget.
Enterprise Management Incentives (EMI)
From 6 April 2023
- Simplification measures will remove the requirements for the company to a) set out within the EMI option agreement the details of any restrictions on the shares to be acquired under the option, and b) to declare that an employee has signed a working time declaration when they are issued an EMI option. It does not remove the working time requirement itself.
From 6 April 2024
- The deadline for notifying an EMI option will be extended from 92 days following grant to the 6 July following the end of the tax year. This will be legislated separately and the impacts will be set out at that point.
Legislation will be introduced in Spring Finance Bill 2023 to modify Schedule 5 to ITEPA 2003 in the following ways:
- Paragraph 37 will be amended to remove the requirement for a company to include details of the restrictions on the shares that can be acquired, within the option agreement.
- Paragraph 44 will be amended to remove the requirement for a company to declare that an employee who was granted options, signed a working time declaration.
- Paragraph 57A will be amended to remove the penalty for failing to produce a signed working time declaration or to provide a copy to the employee.
- New provisions will be introduced to allow EMI share options that were granted before 6 April 2023, but not exercised, to also benefit from the changes.
Company Share Options Plans (CSOPS)
These measures were announced last Autumn. Additionally, it noted that changes to the share options limit will now be achievable through secondary rather than primary legislation.
From 6 April 2023
- Qualifying companies will be able to issue up to £60,000 of CSOP options to employees. The current limit is £30,000.
- Currently where a company has more than one class of ordinary share capital, shares included in a Company Share Option Plan scheme must be from a share class that is ‘worth having’, by being either:
- Open market shares.
- Employee-control shares.
- The ‘worth having’ restriction will be automatically removed from April 2023, there is no need to revise existing share scheme plans.
- Unexercised options granted prior to 6 April 2023 will benefit from the changes to the share options limit and share class restrictions.
See Mini-budget 2022 Changes to CSOP Rules
Non-discretionary tax-advantaged share scheme call for evidence
- A new call for evidence will be launched on the Share Incentive Plan and Save As You Earn employee share schemes. The government will use the call for evidence to consider opportunities to improve and simplify the schemes.
Useful guides on this topic
Spring Budget 2023: at a glance
Freeview summary of the measures announced in the Budget 2023
External links
Budget 2023: Changes to EMI options
Budget 2023: Changes to CSOPs
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