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Business Tax  •  Personal tax  •  Share Schemes  •  Taxation

EMI Share option tax breaks ‘to continue until 2018’

By Lesley Stalker on 26 August 2009

Tax breaks designed to help small businesses retain key staff will now be available until 2018, the Government has announced.

Earlier this month, the Treasury confirmed that it had secured the ‘long-term future’ of Enterprise Management Incentives (EMI), after gaining state aid approval from the European Commission.

The eligibility criteria is also being extended to allow firms that carry out overseas activity to take advantage of the incentive scheme.

EMIs enable small and medium sized companies to offer their employees options over shares worth up to £120,000. Whilst any gain in share value is usually subject to income tax and national insurance, EMI exempts both the business and employee from this liability.

It is thought the new eligibility criteria, together with the certainty provided by the EC’s ruling, will help some 9,000 firms recruit and retain highly skilled employees.

Commenting on the decision, the Economic Secretary to the Treasury, Ian Pearson, said: ‘This is excellent news for small and medium-sized companies, particularly at a time when their success will be crucial to economic recovery.

‘Long-term state aid approval of EMI provides certainty over the future of the scheme, whilst the relaxation of eligibility requirements will help SMEs with substantial international activities to recruit highly-skilled UK-based staff.’

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Tax breaks designed to help small businesses retain key staff will now be available until 2018, the Government has announced.

Earlier this month, the Treasury confirmed that it had secured the ‘long-term future’ of Enterprise Management Incentives (EMI), after gaining state aid approval from the European Commission.

The eligibility criteria is also being extended to allow firms that carry out overseas activity to take advantage of the incentive scheme.

EMIs enable small and medium sized companies to offer their employees options over shares worth up to £120,000. Whilst any gain in share value is usually subject to income tax and national insurance, EMI exempts both the business and employee from this liability.

It is thought the new eligibility criteria, together with the certainty provided by the EC’s ruling, will help some 9,000 firms recruit and retain highly skilled employees.

Commenting on the decision, the Economic Secretary to the Treasury, Ian Pearson, said: ‘This is excellent news for small and medium-sized companies, particularly at a time when their success will be crucial to economic recovery.

‘Long-term state aid approval of EMI provides certainty over the future of the scheme, whilst the relaxation of eligibility requirements will help SMEs with substantial international activities to recruit highly-skilled UK-based staff.’