Reward and Retain Key Talent with EMI Share Options

Boost your investment appeal with SEIS/EIS Advance Assurance. Let Upstack tax experts help you secure approval quickly and make your business more attractive to investors.

What is Enterprise Management Incentive (EMI) Scheme?

Enterprise Management Incentive (EMI) options provide a tax-efficient way for UK businesses to reward and retain key employees by offering them equity in the company. EMI schemes are designed to help fast-growing businesses incentivise their team, giving employees the opportunity to share in the company’s success. At Upstack, we make it simple for you to implement and manage EMI schemes, ensuring compliance with HMRC and maximising the benefits for both your business and your employees.

Benefits of EMI Options Scheme

  • For Businesses:

    Attract and Retain Top Talent: Offer valuable equity to motivate and reward key employees.

    Boost Long-Term Growth: Align employee interests with company success by offering them a stake in the business’s future.

    Tax-Efficient Incentive: EMI schemes offer significant tax advantages for both the company and the employees, with no income tax or NICs due when options are granted.

    Flexible Implementation: Tailor the scheme to meet your business’s needs, from the number of shares offered to vesting conditions.

  • For Employees:

    Ownership Opportunity: Gain equity in the company and potentially profit from future growth.

    Tax-Effective Gains: When employees exercise their options, they only pay capital gains tax (CGT) on the sale of shares, benefiting from a lower tax rate.

    No Immediate Tax Liabilities: No income tax or NICs due when the options are granted, making the scheme accessible without financial burden upfront.

What are the qualifying conditions for an EMI scheme?

  • For Businesses:

    - Your business must be actively trading and have a permanent establishment in the UK.

    - The company must have fewer than 250 full-time employees at the time the EMI options are granted.

    - Your total gross assets must not exceed £30 million.

    - You cannot have allocated more than £3 million worth of EMI shares already.

    - The business must not be controlled by a parent or holding company.

    - If you have subsidiary companies, they must also meet the EMI qualification criteria.

    - You are required to notify HMRC within 92 days of granting the options.

    - Your company must not engage significantly in 'excluded activities'. The full list of these activities can be found on the gov.uk website.

    - For more detailed information, you can refer to the full set of EMI rules in the HMRC manual for EMI schemes.

  • For Employees:

    - They are a legally recognised employee on your PAYE payroll.

    - They work a minimum of 25 hours per week or 75% of their total working hours.

    - They own less than 30% of the company's shares.

    - The total market value of the options they possess does not exceed £250,000.

Our 3-Step EMI Process at Upstack

  • 1. Design Your EMI Scheme:

    We work with you to design a tailored EMI scheme that fits your company’s goals and meets HMRC requirements.

  • 2. Secure HMRC Approval:

    Our experts will handle the necessary paperwork and submit your scheme for HMRC approval, ensuring everything is in place before granting options.

  • 3. Grant and Manage Options:

    Once approved, we guide you through the process of granting options and help you manage the scheme as your company grows.

Start your EMI application now ↗

Let's discuss tax-efficient shares and options!

  • Tailored, Human Support: We offer a personal, hands-on approach, ensuring your EMI scheme is designed specifically for your business’s needs.

  • Affordable & Transparent Pricing: We provide cost-effective solutions with no hidden fees.

  • Compliance Focused: Our team ensures your EMI scheme meets HMRC’s strict requirements for tax efficiency and compliance.

  • Expert Guidance: We bring years of experience in implementing EMI schemes to help you maximize benefits for both your business and employees.

Frequently Asked SEIS /EIS Questions

  • An EMI (Enterprise Management Incentive) option scheme is a tax-efficient way for businesses to offer key employees equity in the company. It allows employees to buy shares at a future date for a fixed price.

  • Employees don’t pay income tax or NICs when options are granted. Instead, they pay capital gains tax on any increase in the value of the shares when they sell, which is typically lower than income tax rates.

  • To qualify, a company must have fewer than 250 employees, less than £30 million in gross assets, and be an independent company. Employees must work at least 25 hours per week or 75% of their working time for the company.

  • A company can grant EMI options with a total value of up to £250,000 per employee, and there’s no overall company limit for the number of options issued.

  • EMI schemes can be structured with specific vesting conditions, so if an employee leaves before the options vest, they may lose the right to exercise them. The company can define the terms of vesting in the scheme's setup.