Small Business Advice

Incentivise your management through an EMI scheme

18 Apr 2017

EMI Schemes

Keeping your key management engaged, motivated and aligned with the company goals can be the key to a successful business but how do you do this when your competitors are willing to pay top dollar for quality people with sector experience? 

Shares in EMI set up

Whilst salary can only go so far in remunerating your management, equity in the business can be the tool which locks in the figures that your business needs to grow. Allowing a member of staff to buy into the business not only makes it less likely that they will leave but also gets them thinking like a shareholder – because they are – and gives them a vested interest in the success of the business. Whilst their salaries can only be worth so much equity keeps working when they are not.

Enterprise Management Incentives

Whilst allowing management to buy into a business can be a great fantastic for incentives, if it’s not done in the right way it can have serious tax implications which can become a financial burden for those involved.

The problem is that if a business gives an employee shares they are in essence giving them something of value, which from HMRC’s perspective is captured as a taxable  benefit, so they want their slice through income tax and national insurance. This can result in very large income tax bills for the management you were trying to incentivise and might well result in them heading off to work for your competitor with the shares you’ve just sold them already banked.

EMI Scheme Structure

A well-structured Enterprise Management Incentive (EMI) scheme deals with this problem. Firstly, it gives your employees the option to buy shares – at a specific, usually below market price, price - in your business without actually giving them shares then and there. This gives your members of staff a reward for staying with the business, a stake in the overall success of the business and avoids all the tax issues that could crop up if you were just to give or sell them shares at below market rate.

As well as all this, the EMI scheme can also have corporation tax benefits for the issuing company which will usually get a reduction in its corporation tax charge equal to the market value of the shares less the amount paid for those shares.

Industrial Suit

Keir Wright-Whyte


Managing Director

0207 043 4000

About the author

Originally graduating with a degree in geography from Edinburgh University, Keir claims that he was then tricked into becoming an accountant by one of the UK's top 5 accountancy practices.The deception extended to the usual training in audit and associated activities.

Keir subsequently worked in a number of advisory roles with clients including in the energy trading, pharmaceuticals and financial services sectors.

He loves working at Accounts & Legal because of the variety of work and clients, the excellent team ethos and morale, the importance placed on genuinely helping and being useful for clients and because he believes what he does matters to clients and helps the firm.

Keir's primary role is to ensure that new clients with complex businesses or needs are on-boarded in the best way and he is a "trouble shooter" both for clients and where complex issues arise internally. He also helps the accounting teams strive to improve what we do for clients, whether processes or services.

When not debiting or crediting, Keir has a penchant for fixing old buildings, skiing, surfing and cycling.


We can help your business grow


We're accountants who specialise in working with small businesses, from start ups to growing businesses. With offices in London and Brighton, we're a highly cost effective solution for compliance but also for strategic planning, bookkeeping, tax and accounting support


Call us today or get an instant quote for our services!