Tax Schemes

Share your growth potential with an EMI share incentive for employees

Enterprise Management Incentive (EMI) allows companies to offer flexible incentives that are tax-advantaged for companies and employees who meet the qualifying criteria.

This share option scheme is government-backed and allows you to share the ownership of your business with employees.  This is particularly beneficial to startups as it acts as an incentive to retain the best talent who will remain with the company as the business grows.

The company is limited to a £3m total value of shares and an individual employee is limited to a total value of shares of £250,000.

To qualify, companies must satisfy certain conditions:

 

  • The company must carry out a “qualifying trade” and must have a UK permanent establishment.
  • A “qualifying trade” is one that is carried out with the intention of making a profit.
  • “Non-qualifying” trades include farming, dealing in Iand, financial trading & banking, leasing and property development, provision of legal services and ship building.
  • Company assets must not exceed £30m at the time the EMI option is granted.
  • The shares must be granted in an independent company or in the case of a group, the parent company.
  • The company must have less than 250 full-time equivalent employees at the time the EMI option is granted.
  • A full-time employee is one who works 35 hours a week or more.
  • Employees must spend at least 25 hours a week, or if less 75% of their working time carry out the business of the company.

The shares are bought at a fixed price known as the Exercise Price which is agreed with HMRC.  Under this scheme the only tax that comes about is capital gains tax and this is at a reduced rate of 10% if the shares are held for more than 24 months.  The scheme provides a benefit for employees and encourages them to perform well.  Generally, no income tax or NIC are payable when an employee takes up the EMI option. As a startup this can help a company provide incentives to keep skilled and talented employees and attract future employees.

You can find out more about the EMI share scheme here:- https://www.gov.uk/tax-employee-share-schemes/enterprise-management-incentives-emis

We can help you setup an EMI share scheme. Contact us at AccountsPro on 020 7193 8798, via email at hello@accountspro.co.uk or send us a message via our contact page:- https://accountspro.co.uk/contact-us/

 

Tax Schemes

Startup and Small Business Series: Work from Home Tax Relief 2021/2022:

Throughout the pandemic employees have been able to claim work from home tax relief for additional costs incurred whilst working from home.  The good news is that this scheme is set to continue for the 2021/2022 tax year.

HMRC has confirmed that the tax relief scheme will continue and can be claimed for the whole of 2021/2022 and the claim can be made even if you’ve only worked from home for one day so far.

Employees can claim up to £6 week without providing evidence for costs incurred, such as additional heating and electricity, and this applies even if you return to the office or your time is split between home and the office. You can choose to claim for the exact amount if this is more than £6 a week but you will need to provide evidence of the costs incurred such as bills and receipts.

What you need to know to claim:

  • To make a claim for Work From Home Tax Relief you will need a Government Gateway user ID and password.  This is easy to create if you don’t already have one.
  • If you fill in a self-assessment to pay your taxes you will need to apply via your self-assessment form, either online or via post.
  • You can claim if you must work from home for all or part of the week on a regular basis
  • It is an individual benefit but others in your household can claim if they too must work from home.
  • Additional costs include metered water bills, heating, home contents insurance, business calls and new broadband connections.
  • It does not include any cost that would stay the same whether you were working at home or not.
  • You will have to sign an online declaration to confirm that the extra costs are as a result of having to work from home.
  • The amount of tax relief you get will be dependent on your income tax band – around £62 for basic taxpayers and £124 for higher taxpayers for the whole year if the £6 a week option is chosen.

The process for applying for Work From Home Tax Relief is quick and simple and can be completed via the Government’s website.

If you need any assistance or advice on this then please get in touch with us on 020 7193 8798. Alternatively, you can send us an email at hello@accountspro.co.uk or via our website:- https://accountspro.co.uk/contact-us/