Enterprise Management Incentive (EMI) schemes are a type of flexible and tax-advantaged employee share scheme. To be eligible there are various qualifying requirements, including employees who hold EMI options fulfilling certain ‘working time’ criteria.
Over the last few months, there has been a lack of clarity as to whether putting an EMI option-holder employee on furlough would cause them to cease to qualify, with the loss of the employee tax benefits.
The Government has now published new draft clauses for inclusion in the Finance Bill 2020 which if enacted would mean the following will not result in a disqualifying event for EMI purposes:
- the option holder being furloughed
- the option holder working reduced hours as a result of the Covid-19
- the option holder taking leave as a result of Covid-19
If enacted, the amendments would apply with retrospective effect from 19 March 2020, but currently would be time limited to apply until 5 April 2021. The Government may extend that time limit to 5 April 2022.
For further advice on EMI options, please contact: