15 May
2018

EMI approval renewed by EU Commission

I am very pleased to report that HM Treasury has just confirmed that the Commission has approved the ‘prolongation’ of EMI. The text of the announcement from the Commission’s website is shown below. More details as we receive them.

State aid: Commission approves prolongation of UK Enterprise Management Initiative scheme

The European Commission has approved under EU State aid rules the prolongation of the UK Enterprise Management Initiative scheme, which reduces the taxation of employee share options for small and medium sized enterprises (SMEs). Under the scheme, employees of SMEs will benefit from reductions from income tax and/or national insurance contributions, when exercising their share options. Furthermore, also the employer (i.e. SMEs that are listed companies and would therefore be subject to national insurance contributions when the share options are exercised) will benefit from reductions from such contributions. The aim of the scheme is to allow SMEs to recruit and retain employees, and thus enable their growth, without unduly distorting competition in the Single Market. The Commission initially authorised the scheme in 2009. In March 2018, the UK authorities notified their plans to prolong the scheme to the Commission. The Commission's assessment found that the prolongation of the measure is necessary to help UK SMEs attract and retain talented and skilled personnel. It also found that the measure contains a number of safeguards, such as a cap on the value of the share options that can be subject to the tax advantage both at the employee and employer level, ensuring that potential distortions to competition are limited. On this basis, the Commission concluded that the measure is in line with EU State aid rules. Without prejudice to any provisions of the Withdrawal Agreement, which is under negotiation, this Commission decision only applies until the UK ceases to be a Member State. More information will be available on the Commission's competition website, in the public case register under the reference SA.47789.(For more information: Lucía Caudet – Tel. +32 229 56182; Yizhou Ren – Tel.: +32 229 94889; Maria Sarantopoulou - Tel.: +32 229 13740)