EMI schemes & employee incentives

Successful employers know how important it is to attract, retain and incentivise the best people. Allowing key staff to take an equity stake in the company they work for is a very effective way to achieve these aims.

 

There are a number of tax advantaged company share schemes available, but many of our clients have found that the Enterprise Management Incentive (EMI) share option scheme is the most attractive.

As well as being tax efficient for the employee, EMI arrangements offer a great deal of flexibility to the employer as to which members of staff they wish to incentivise, the performance criteria they set for the scheme members and the protection the scheme provides for existing shareholders.

At Friend Partnership, we have many years’ experience in advising on, creating and implementing EMI schemes and other share-based employee incentives (such as the issue of growth shares) for our clients. Please contact our Tax Partner, David Gillies if you would like to discuss employee share-based incentives in more detail.

EMI basic rules

The employer

  • the employer company must be unquoted and not under the control of another company
  • the company’s gross assets must be less than £30 million
  • the company must be carrying on a qualifying trade
  • the company must have fewer than 250 employees (or full-time equivalent) at the time the options are granted
  • the maximum value of shares subject to options is £3 million, based on the market value of the shares at the date the options granted

The employee/director

  • the maximum value of options that can be held by the employee is £250,000, based on the market value of the underlying shares at the date of grant
  • the employee or director must be full-time or work a minimum 25 hours a week or 75% of available working time (whichever is the lower)
GSA Techsource Limited Case Study
GSA Techsource case study

GSA Techsource is a leading provider of specialist recruitment solutions to the IT, Project Management and Healthcare Informatics markets. Based in Staffordshire, the company has been established over 25 years.

GSA has been a client of Friend for four years.

GSA’s directors are Jayne Morris and Neil Jones. They explain more about the firm and its relationship with Friend:

“We have been a client of Friend for four years. We appointed them as advisers to the company and its owners and they were instrumental in creating the group structure which we have today.

Friend advised the current management team as part of the Management Buy Out which enabled the majority shareholder to exit the business in a highly tax efficient manner.

“The transition for us from employees to business owners has been challenging and not without its problems. But the team at Friend helped us deal with these issues with practical and commercial advice at all stages.”

Friend Partnership has helped GSA with a range of matters, including: devising and implementing an employee share scheme, assisting with senior employee changes, putting in place appropriate personal tax planning arrangements and generally being on hand for the ‘sounding board’ moments when new business ideas arise.

“Our annual audit is always conducted efficiently and with little drama and it gives the directors confidence in knowing that the figures have been subject to independent scrutiny.”

“GSA has risen to, and dealt with, the challenges over the past few years. With the help and support of Friend we are now looking forward to the future with great optimism.”

Find out more at  www.gsatechsource.com

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