If you are in the process of setting up an enterprise management incentive (EMI) scheme or are thinking about granting EMI options then this important update will be relevant to you.


The EMI tax regime is subject to EU state aid approval. The current regime received approval from the European Commission in July 2009 but such approval lapsed on 6 April 2018. HMRC has issued a bulletin stating that ‘the government has, since last year, been following the process of applying to the European Commission for fresh approval and we await the Commission’s final response'. View the full version of the bulletin.

How this could affect you

HMRC has confirmed that any EMI options granted on or before 6 April 2018 will not be affected by the lapse in EU state aid approval. Any EMI options granted in the period from and including 7 April 2018 until fresh approval has been obtained, run the risk of being treated as ‘unapproved or ‘non-tax advantaged options’ meaning they could lose all of their EMI tax advantages. Therefore, if you are considering granting EMI options or implementing a new EMI scheme, we would advise you to hang fire! Whilst we believe that it is simply a matter of time before approval is forthcoming, we do not at this stage know when such approval will be received, nor do we know whether or not the approval will be backdated. In the light of this uncertainty, it would be prudent to wait until approval is received if at all possible.


If you have already carried out a valuation for the purposes of EMI and had this agreed with HMRC, you will have 60 days from the date of the agreement in which to grant the EMI options before the valuation agreement with HMRC expires. You may need to seek an extension from HMRC for your valuation but this will only be for an additional 30 days. Therefore, potentially you may need to carry out a fresh valuation and agreement if too much time has lapsed or any significant events have occurred within your company in the intervening period.

We will provide a further update as soon as any further information comes to light.