HMRC has published a final report on the independent research it commissioned on whether EMI options were achieving its policy objectives. These objectives were stated as being:
- to recruit skilled staff to small, high risk companies;
- to retain skilled staff in these companies; and
- to encourage the growth of these companies.
The conclusion of the report includes the following points:
- the majority of employers have found the effects of operating an EMI scheme to be positive and will continue to use it, particularly with the aim of retaining key workers;
- certain improvements could be made to the effectiveness of EMI such as raising awareness and focusing more on the recruitment aspects of EMI;
- it is currently not clear to what extent EMI has had any additional impact on helping smaller, high risk companies; and
- the majority of employers considered the key advantage of EMI over other schemes to be its more tax advantageous treatment.
Although the findings of this report seem to imply that, on the whole, EMI schemes are very effective it should be noted that one of the significant tax advantages of the schemes (that taper relief begins to run from the date of grant of an option instead of the date of exercise) will be lost from April when taper relief is abolished. Despite this loss of taper relief, EMI schemes are likely to remain attractive to most.