State Aid Approval for EMI

By Colin Kendon, Fleur Benns


On 4 April 2018 HM Revenue & Customs (HMRC) confirmed in published bulletin no 27 that State Aid approval for EMI options expired on 6 April and that although the government has applied for renewal this has not yet been granted.

HMRC warns that EMI options granted from 7 April until State Aid approval is once again confirmed, will not benefit from the EMI tax advantages and may therefore be taxed as non-qualifying options (being subject to income tax and national insurance contributions on exercise).

Although HMRC have confirmed the government is working to make this limbo period as short as possible, we do not know when State Aid approval will be given. Accordingly the best approach is to delay any proposed EMI grants until we have certainty as to the tax treatment.

EMI options granted before 7 April 2018 will, in HMRC’s opinion, still qualify for the EMI tax treatment.

For more guidance on EMI options, view our factsheet here.