The government announced a number of changes to simplify the process for granting tax-advantaged enterprise management incentive (EMI) options at the Spring Budget 2023.
The final change to be implemented applies to EMI options granted on or after 6 April 2024 and extends the time limit for companies to notify HMRC of these grants (this will now be by 6 July following the end of the tax year in which the grant was made).
What are EMI options?
EMI options are a flexible discretionary employee share option arrangement aimed at qualifying small to medium-sized enterprises.
If the qualifying requirements are met, then relief from income tax and National Insurance contributions may be available on exercise. These requirements broadly relate to the option terms, the status of the company and the employees (who must satisfy a working time requirement).
To qualify for tax relief, the grant of the EMI options must also be notified to HMRC within the applicable notification window. This process is where the latest administrative simplification has been made.
What are the EMI notification requirements?
Companies operating EMI plans should take note of the new notification deadlines:
| Date of grant | Notification period |
| EMI options granted on or after 6 April 2024 |
Company must notify HMRC of the grant by 6 July following the end of the tax year in which the grant was made |
| EMI options granted before 6 April 2024 |
Company must notify HMRC of the grant within 92 days following the date of grant |
It is important that companies notify HMRC of the grant of EMI
options within the applicable notification period – otherwise
EMI tax relief will not be available.
Notifications must be submitted by the company online using HMRC's Employment Related Securities Service, which links to the "Submit an EMI notification" webpage.
The extended notification period for EMI grants made on or after 6 April 2024 brings the notification window into line with the deadline for filing all employment-related securities annual returns (by 6 July following the end of the relevant tax year).
For EMI options granted before 6 April 2024, companies must make sure that they notify HMRC within 92 days of grant.
In-year notifications
Although the notification period has been extended for grants made on or after 6 April 2024, HMRC has confirmed that a company can still notify HMRC of EMI options during the tax year in which they were granted. Many companies may wish to continue to notify HMRC shortly after the grants have been made, rather than waiting until the end of the relevant UK tax year to do so.
Need to register plan before notifications can be made
Companies that have granted EMI options for the first time (or that wish to register a new arrangement) should note that the company must register their arrangement under HMRC's Employment Related Securities Service before any notifications can be made.
The registration process can take around 10 days, so this should be factored into the timetable.
Record keeping
Companies are reminded to save copies of all notifications and returns made to HMRC, as its online service does not save the details and companies will not be able to access them again.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
