The HMRC notification deadline for the grant of EMI share options has changed, but some plans still require earlier reporting.
There were several changes to the Enterprise Management Incentive (EMI) regime as part of the 2023 Budget, including a change to the statutory deadline for notifying HMRC of the grant of new EMI options. Where options are granted on or after 6 April 2024, the normal deadline has changed to 6 July after the tax year of grant having previously been 92 days from the date of grant.
It is vital not to miss this deadline because a failure to notify means options will become non-tax advantaged options.
It is important to recognise the HMRC deadline is not the only one to consider. Some EMI share Plan rules will have been drafted before the change and may require the employer to notify HMRC within 92 days of the date of grant. Failure to notify accordingly will mean the options will lapse or will again become non-tax advantaged. This provision in the plan rules will apply irrespective of the change in legislation.
Any employers affected will need to take urgent action if their EMI options were granted on 6 April 2024 as 92 days forward from 6 April is 7 July 2024 (a Sunday). The date continues to roll forward throughout 2024-25. Leaving the notification until 6 July 2025 will be too late.
An immediate report may be needed and/or consideration given to amending the plan rules to prevent the issue in the future.
Useful guides on this topic
Budget 2023: At a glance
The Chancellor, Jeremy Hunt, made his Spring Budget 2023 speech on Wednesday 15 March. Highlights of the speech include a proposal to allow companies to expense Capital Allowances and to abolish the pension Lifetime Allowance. Further key announcements for Small and Medium-sized Entities (SMEs) and their owners are below.
EMI: Designing an EMI share option scheme
What is the Enterprise Management Incentive (EMI) scheme? What's the difference between EMI and an unapproved share scheme?
EMI: Enterprise Management Incentive Scheme
What is the Enterprise Management Incentive (EMI) scheme? What's the difference between EMI and an unapproved share scheme?
External link
Source KPMG: Notifying EMI option grants to HMRC - you may need to act by 7 July
