BIA submission to HMT EMI call for evidence
The BIA has responded to the HM Treasury call for evidence on EMI share options.
In our submission, we recommend:
- The total gross assets threshold is increased to £86 million to align with the SME definition used for R&D tax credits. In the past five years 65 equity investments in EMI-eligible life science companies have exceeded £30 million, but only 18 have exceeded £86 million.
- The unexercised share options threshold of £3m is changed to a percentage of total issued share capital value. This will address valuation increases, which should be incentivized not punished, and unexpected fluctuations.
- The individual financial limit of £250,000 is increased to reflect remuneration inflation in senior leadership roles since 2012, allowing the scheme to remain competitive and relevant to the market.
- The £1m lifetime allowance (through Business Asset Disposal Relief) should be returned to £10m so that SMEs can utilise EMI to attract experienced individuals who have benefitted from EMI in the past
- In the event of any changes to Capital Gains Tax rate or Business Asset Disposal Relief, the tax benefits of the EMI scheme should be retained
- The Knowledge Intensive Company definition is used to better target the scheme and reduce costs to the tax payer