Mixed news for EMI Schemes in 2008 Budget

13th March 2008

As from 6 April there will be the first increase in the individual grant limit for EMI options since their introduction in 2000.  The limit rises from £100,000 to £120,000.

From Royal Assent, schemes will however be limited from that date to companies with fewer than 250 full-time employees, with part time employees counting proportionately.

In addition, shipbuilding, coal and steel production will be excluded activities from the date of Royal Assent meaning that companies in those areas will thereafter no longer qualify for EMI.

Existing awards which would otherwise be affected by the new qualifying company rules will be protected.

Nick Wallis of Smith & Williamson comments:

"The increase in the individual grant limit is to be welcomed as the first increase for any HMRC tax-favoured scheme since 2000.  On the other hand, the overall maximum level of awards (£3,000,000) remains unchanged, so it could not be characterised as over-generous.

The restriction to 250 employees is said to be required for EU State Aid purposes.  It is unlikely to affect many schemes but will certainly affect some, particularly those with labour-intensive activities.   

The exclusion of companies involved in shipbuilding, coal and steel production is also apparently EU-driven."

For further information:

Nick Wallis, tax director. Tel 020 7131 4187

Press Office

Kate Harrison / Layisha Laypang 020 7131 4228 / 4550

Disclaimer

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

Note to editors

Smith & Williamson is an independent professional and financial services group employing over 1,400 people. The group is a leading provider of investment management, financial advisory and accountancy services to private clients, professional practices and mid-to-large corporates. The group operates from offices in London, Belfast, Bristol, Glasgow, Guildford, Maidstone, Salisbury, Southampton, and Worcester.

Smith & Williamson Limited

Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International, a worldwide network of independent accounting firms.