Treasury reviews small business tax break

The Treasury is reviewing a tax incentive scheme for small business after the
cost to government revenues rose by more than £100m.

Research company Ipsos Mori has been asked by the Treasury to look into
Enterprise Management Incentives
(EMI) are being abused by
small businesses, reports the

Daily Telegraph

The scheme allows key staff to exercise share options without income tax or
NICs. This allows them to only pay capital gains tax as low as 10% when taper
relief starts – when the share option is issued rather than when it is

For 2005/2006, the scheme cost the Treasury £170m, and is estimated to hit
£250m this year.

‘I don’t think EMI is being abused,’ said Malcolm Hurlston, chairman of the
Employee Share Ownership Centre in the paper. ‘If it was not successful it would
not cost anything.’

Further reading:

View HMRC’s guide to EMIs

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