Empower your key employees and drive business growth with Enterprise Management Incentives (EMI). Explore innovative solutions that incentivise and reward top talent, fostering a culture of loyalty, engagement, and success within your organisation

The Enterprise Management Incentives share option scheme is a Government approved, tax beneficial and very flexible way of incentivising your staff. In a nutshell, Enterprise Management Incentives is the best type of share scheme for employees and the company.

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Enterprise Management Incentives Advantages

  • Employee Engagement and Retention: EMI schemes are effective tools for attracting and retaining top talent. By offering employees a stake in the company’s success, EMI schemes foster a sense of ownership and loyalty among employees, leading to higher levels of engagement and retention.
  • Alignment of Interests: EMI schemes align the interests of key employees with those of the company’s shareholders. When employees have a direct financial interest in the company’s performance, they are more likely to work towards achieving the company’s goals and objectives.
  • Motivation and Productivity: EMI schemes provide employees with a tangible incentive to perform at their best. The opportunity to share in the financial rewards of the company’s success motivates employees to increase their productivity, innovate, and drive results.
  • Tax Benefits: EMI schemes offer tax advantages for both employers and employees. Qualifying share options granted under EMI are subject to favourable tax treatment, making it an attractive incentive scheme for businesses and employees alike.
  • Flexibility and Customisation: EMI schemes are flexible and can be tailored to suit the specific needs and objectives of the company. Whether it’s incentivizing key employees, rewarding performance, or retaining talent, EMI schemes can be customised to align with the company’s culture, values, and long-term goals.
  • Attractiveness to Investors: EMI schemes can enhance the company’s attractiveness to investors by demonstrating a commitment to rewarding and retaining key talent. Investors are more likely to view companies with effective incentive schemes in place as well-managed and capable of driving long-term growth and success.

Tax Benefits of an Enterprise Management Incentives

  • Income Tax Relief for Employees: Employees who are granted EMI options can benefit from income tax relief. This means that they may not have to pay income tax on the difference between the exercise price of the option and the market value of the shares at the time of exercise, subject to certain conditions.
  • Capital Gains Tax (CGT) Treatment: When employees exercise their EMI options and subsequently sell their shares, they may be eligible for capital gains tax treatment. This can result in a lower rate of tax compared to income tax, potentially reducing the overall tax liability for employees.
  • Entrepreneur’s Relief: Employees who meet the qualifying conditions may be eligible for Entrepreneur’s Relief when they sell their shares acquired through EMI schemes. This relief provides a reduced rate of CGT on qualifying gains, potentially resulting in significant tax savings for employees.
  • Corporation Tax Deductions for Employers: Employers can generally claim a corporation tax deduction for the difference between the market value of the shares at the time of exercise and the exercise price paid by employees. This can help to reduce the overall tax liability for the company.
  • Tax-Efficient Exit Strategy: EMI schemes can also provide a tax-efficient exit strategy for both employers and employees. If the company is sold or goes public, employees may benefit from CGT treatment on the sale of their shares, potentially resulting in lower tax liabilities compared to other forms of remuneration.

The Enterprise Management Incentives Full Solution

Edge Tax offers a ‘one-stop service’ – we cover all the legal and the tax/valuation requirements

All of the scheme agreement legal documentation you need – scheme rules, option certificates, board minutes, letters to employees

Your company share valuation carried out and agreed with HMRC

Advice and in-depth discussion with our specialist on how to best structure your scheme

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