EMI aftercare

Aftercare instructions for the employer

If all else fails, RTBI

When you buy a new consumer item you usually get instructions on “care and use”.  If you’re like us, you probably never read them except as a last resort.  What follows are your “care and use” instructions for your EMI option.  Please don’t ignore them.  Do not attempt to dismantle your EMI option: it contains no user-serviceable components.

Annual return

HMRC will issue you with a special “EMI return” in early April every year.  This asks about grant of options, exercise of options, alterations to options etc.  In most years there will be “nothing to declare” but the return must be sent in anyway.  If you have any questions about the return, please ask us.  There are penalties for failing to file a return, even if there is nothing to show on it.


At any time up to fifteen months after the date the option is granted the Revenue have the power to enquire into any aspect of the option.  If they do this, they will issue an “enquiry notice” specifying what they want to know.  If you get an enquiry notice in relation to the option, do not ignore it and hope it goes away: it won’t.  But don’t panic either.  Instead, please contact us without delay.

Exercising the option

The option document contains instructions on how and when the option-holder can exercise it.  Please let us know as soon as it is intended that the option will be exercised.  In some circumstances it may be necessary to make a special election within 14 days of the exercise of the option.

Doing your accounts

You may need to reflect the grant of the option in your company’s accounts.  Whisper “FRS 20” in your auditor’s ear: and if he wants to talk it through with us, give him our number

Disqualifying events

Certain “disqualifying events” will affect or even destroy the tax-favoured status of the option.  Please let us know immediately if any of the following happen: action may need to be taken within forty days of the event.  Better still, let us know BEFORE any of the following happen: we may be able to avoid the problem arising:

  • The company falls under the control or dominant influence of another company
  • The employee ceases to be employed by the company or reduces his or her working time below 25 hours per week
  • Any change is made to the terms of the option; or to the company’s share capital; or any further option is granted to the employee
  • The company changes its activities in any way.  In particular, if its starts to carry on any non-trading activities (such as property investment) or any “prohibited trade”

Prohibited trades

This is a list of the main prohibited trades (but remember that in addition any non-trading activity such as property investment is also prohibited)

  • Dealing in land, commodities, futures, shares, securities or financial instruments
  • Property development
  • Dealing in goods other than in any ordinary trade of wholesale or retail distribution
  • Leasing, letting assets on hire or receiving royalties or licence fees
  • Farming, market gardening or occupation of woodlands
  • Operating or managing an hotel, nursing home, residential care home or similar
  • Providing services for an associated business which is itself a prohibited trade



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


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