Share option tax breaks ‘to continue until 2018’
Tax breaks designed to
help small businesses retain key staff will now be available until 2018, the
Government has announced.
Earlier this month, the
Treasury confirmed that it had secured the
The eligibility criteria is also being extended to allow firms that carry
out overseas activity to take advantage of the incentive scheme.
EMIs enable small and medium sized companies to offer their
employees options over shares worth up to £120,000. Whilst any gain in share
value is usually subject to income tax and national insurance, EMI exempts both
the business and employee from this liability.
It is thought the new
eligibility criteria, together with the certainty provided by the EC’s ruling,
will help some 9,000 firms recruit and retain highly skilled employees.
Commenting on the
decision, the Economic Secretary to the Treasury, Ian Pearson, said: ‘This is
excellent news for small and medium-sized companies, particularly at a time
when their success will be crucial to economic recovery.
‘Long-term state aid
approval of EMI provides certainty over the future of the scheme, whilst the
relaxation of eligibility requirements will help SMEs
with substantial international activities to recruit highly-skilled UK-based
staff.’