Enterprise Management Incentive Scheme

Enterprise Management Incentive Scheme

a UK arrangement introduced in 2000 which enables small companies (assets under £30 million) to grant SHARE OPTIONS to their employees. Originally the maximum grant which could be made available was £1.5 million and limited to no more than 15 people. In 2001, the threshold for grants was raised to £3 million and the scheme was opened up to cover all employees. See EMPLOYEE SHARE OWNERSHIP PLAN.
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He adds that businesses can take advantage of other tax effective schemes to persuade lenders or investors of the commitment of directors and employees: "The Enterprise Management Incentive scheme (EMI) gives employees the option of acquiring shares in the business at some stage in the future, but at a price set when the option is granted," he said.
From third parties the gripes generally include failure to achieve venture capital reliefs via Enterprise Investment Scheme (EIS) or its more exciting younger sister Seed EIS (SEIS), or missing opportunities to lock in and reward key staff via the very tax advantaged government approved Enterprise Management Incentive scheme (EMI).
Perhaps of more interest for more senior staff where there is a possibility of a future company sale is the welcome relaxation to the Enterprise Management Incentive Scheme (EMI) from April 2013.
The Enterprise Management Incentive scheme (EMI) which also aims to help SMEs recruit and retain talent is to be improved and reformed, providing additional support to help start-ups access the scheme.
Effected through the exercise of share options and granted under the company's Enterprise Management Incentive Scheme, at a total cost of GBP117,376.
He outlined just three schemes which could create more profits and enhance small companies' ability to reinvest in their future - the Enterprise Management Incentive Scheme, the Enterprise Investment Scheme and Enhanced Capital Allowances.
We created an equitable share incentive scheme for them in 2000, under the principles of the Government's Enterprise Management Incentive scheme, and it has recently issued its third tranche of employee shares.
The Enterprise Management Incentive scheme is an ideal way of providing substantial incentives to important staff without draining cash and profits.
Existing schemes such as the SAYE approved profit sharing and executive share option schemes will still be available, but tax breaks on the new all employee share ownership plan (Aesop) and the enterprise management incentive scheme (EMI) should guarantee the interest of all eligible businesses.
Tom Kelleher of Capital Law, who advised RUMM on the equity deal and the implementation of a new enterprise management incentive scheme for staff, said: "RUMM's ability to attract such a high-calibre chair at this exciting time in its development underlines the opportunities that exist for innovative knowledge-based companies here in Wales to drive forward ambitious growth plans with the aid of experience and investment from senior experienced business leaders.
While there can be some unexpected tax implications in providing shares to employees, there is an opportunity to offer shares to employees under the Inland Revenue's Enterprise Management Incentive scheme.
He said: "At the moment, only shares issued under approved share option schemes and the enterprise management incentive scheme receive favourable tax treatment in the hands of the employee.

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