EMI state aid approval lapses...


First published in Tax Journal

What are the practical implications of the expiry
of EU state aid approval for EMI schemes?

The enterprise management incentive (EMI) regime was introduced by FA 2000 as a way of helping smaller entrepreneurial businesses recruit and retain the best talent. As the tax benefits afforded by EMI are only available to companies with certain qualifying business activities, they involve the provision of state aid. Under EU rules, state aid is unlawful unless it falls within an applicable exemption or if it is seen as compatible with treaty provisions.

The current EMI regime was approved by the European Commission in a decision of 9 July 2009 (although it was noted that the UK had put the regime in place many years previously, in breach of EU rules). The approval lapsed on 6 April 2018, and whilst a Commission decision to renew approval has been sought by the UK government, it has not yet been forthcoming.

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