In April, we received worrying news and published our news item Warning: grant of EMI share options after 6 April 2018 may not be eligible for tax relief. It appeared that state aid approval for the relief was about to time expire and the UK was waiting to hear back from the European Commission.
In a press release published today, the European Commission has confirmed its approval for state aid to continue for the UK’s Enterprise Management Initiative (EMI) scheme.
The scheme reduces tax on employee share options for small and medium sized enterprises (SMEs).
The Commission initially authorised the scheme in 2009, and in March 2018, the UK authorities notified their plans to prolong the scheme to the Commission. In granting state aid approval, the Commission's assessment states:
"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."
It is strange that HMRC have still not published anything some 2 weeks after approval for the extension by the European Commission