As the annual deadline of July 6th approaches, businesses utilising the Enterprise Management Incentives (EMI) share option scheme must be well prepared to submit their EMI annual return to HMRC. As with all tax-related reporting, accuracy and compliance are essential. Failure to comply can impact the validity of your EMI scheme.
What is the EMI Scheme?
The Enterprise Management Incentives (EMI) scheme is a tax-efficient share option scheme designed for small, high-growth companies in the UK. The primary goal of the EMI scheme is to help these companies attract and retain talented employees by offering them equity incentives in the form of share options.
Under the EMI scheme, employees are granted options to purchase shares in the company at a predetermined price, which they can exercise at a future date. When structured correctly, both employees and employers can gain significant tax advantages from the EMI scheme.
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To qualify for the EMI scheme, companies must meet certain criteria, including having gross assets of no more than £30 million and trading in a qualifying business activity. Additionally, there are limits on the total value of share options that can be granted to an individual employee and across the company as a whole.
Submitting Your EMI Notification
Within 92 days of your EMI scheme being set up, you must notify HMRC that you have set up an EMI share option scheme and provides details about the company as well as the staff members on your EMI scheme.
You will need to provide the following information about your company in order to submit the EMI Notification:
- Company name, address and registration number.
- The date options were granted.
- Name, address and National Insurance number of each option holder.
When filing your EMI Notification, it is important to ensure that all information provided is accurate and complete. If there are any errors or omissions on the form, this could result in a delay in processing by HMRC and a potential penalty for submitting an incorrect form.
If you need help with filing your EMI Annual Return or have any questions related to Enterprise Management Incentives (EMI), The MGroup your friendly Oxfordshire Accountants can help. Contact us today to get your EMI Notification done right.