MM writes: I want to take on a new executive and have been discussing a scheme to give him or her the right to qualify for an equity stake in the business. I understand the government has introduced a scheme that may be suitable. Where I can get further details?
You probably mean the enterprise management incentive scheme (EMI) announced in the chancellor´s pre-budget statement last month. It is aimed at small, higher-risk trading companies and is designed to help attract and retain key workers who perhaps would not otherwise join smaller companies because of the risk. The proposals may change before becoming law next summer, but at present the plan is to allow companies to issue up to £100,000 of share options to a maximum of 10 workers. The options would not attract income tax when exercised, nor would the company incur national insurance charges. When the shares were sold they would qualify for business- asset taper relief calculated from the date the options were granted. There would be no need for the scheme to gain approval from the Inland Revenue. Companies would simply notify the Revenue of the schemes they had started. It is planned that the relief would be available to companies that currently would be able to attract money from venturecapital trusts and enterprise investment schemes. The draft legislation and commentary is available from the Revenue website – www.inlandrevenue.gov.uk/shareschemes