People First: EMI Schemes

Posted on: November 25th, 2016

According to a recent survey conducted by the Department for Business, Innovation & Skills (BIS) into the issues facing UK businesses in 2016, over half of small and medium sized businesses state that the retention of employees is a “major obstacle to the success of the business”.

As a result of strong competition in the UK employment market, employees are looking for increasingly rewarding salary and benefits packages. Many businesses struggle financially to offer these packages to recruit and then retain high quality and talented individuals. We are often asked by our clients whether there are other more flexible incentives that can be offered to be competitive in the employment market.

Coffin Mew has therefore launched its People First campaign. It involves the granting of share options to employees under the popular, government supported Enterprise Management Incentive (EMI) Scheme. This is a tax efficient way of retaining key employees, getting them to think about longer term benefits and buying in, emotionally, to the business itself.

Your employees are granted options to buy shares in your company – but usually only once you have found a buyer for the business. Essentially you are sharing some of the sale proceeds with key chosen staff in a tax efficient way for both the employee and the company. The employees don’t have to come up with the purchase price to buy the shares until the sale and they do not become shareholders until the company is just about to be sold – so you don’t have to worry about paying dividends to them or diluting voting rights in the company.

With the Chancellor announcing in the recent Autumn Statement that the Employee Shareholder Scheme (ESS) has been scrapped with immediate effect, EMI schemes are one of the last few remaining HMRC approved employee share schemes available.

We would be delighted to discuss the benefits of our People First campaign in more detail with you and the other services that we can offer your business.  

Jonathan Sherman is a Solicitor in the Corporate team at Coffin Mew, for further information please contact him on 023 8033 4661 or email jonathansherman@coffinmew.co.uk.