How to setup your EMI options scheme on SeedLegals
The Enterprise Management Incentive (EMI) Scheme is UK’s tax efficient way of granting share options to employees. Through EMI, there is no tax payable when you grant an employee a share option, no tax payable when the employee exercises the share option at the strike price agreed with HMRC, and when the underlying share is later on sold at a profit the capital gains tax is set at 10% (instead of 20%). SeedLegals’ EMI Option Scheme is fully compliant with UK’s legislation. Here’s an article to help you decide when the right time is to set up an EMI Option Scheme.
Please ensure your company qualifies for an EMI Share Option Scheme, here is an interesting article you might want to check out.
This guide will walk you through the full process of setting up your EMI options scheme on SeedLegals.
1. Create an Option Pool
2. Input your EMI Valuation details
3. Set up your EMI Option Scheme
4. Register your EMI Options Scheme with HMRC
5. Grant options
6. Notify HMRC of your Option Grants
7. Joint NIC Election
1. Create an Option pool
This should already be completed by this stage, but if not, please follow along with this guide: How to create an option pool
2. Input your EMI Valuation details
You should have a valid EMI Valuation from HMRC, our step-by-step guide to completing your EMI Valuation application on SeedLegals can be found here.
Input the approved AMV and UMV from your EMI Valuation approval letter to your EMI Valuation. 
3. Set up your EMI Option Scheme
We have a video tutorial taking you through the next steps following receipt of an approved EMI Valuation from HMRC here.
You can set up your EMI scheme from the Share Options window on the left-hand side of your SeedLegals Dashboard and then click 'view scheme' on your EMI Scheme.
Then, under the pencil button next to the Option Scheme rules, you can choose the terms of your scheme relating to vesting and exercise. These rules will be the default rules for each team member added to the scheme, however, if you wish to, you can change the vesting rules when granting to specific team members.
You may want to check out our guide with the most commonly selected terms here.
Once you have completed the EMI scheme rules, then you are ready for the company to adopt the Option Scheme.
Please hold a board meeting and then enter the details of the meeting under the Board Resolution below. Then the chairperson will sign the Board Resolution.
4. Register your EMI Options Scheme with HMRC
Please remember to register your EMI Scheme with HMRC, our guide here will take you through just how to do so.
Once done, please input the date of your registration into the EMI Scheme workflow and hit 'Adopt scheme'.
If you have previously registered your EMI Scheme, you may skip this step.
5. Grant options
You can now set up your option grants for your employees using our guide here. You may find our 1-minute Loom video guide here useful as well.
Please remember to hit 'Approve option grant' when you are done! You will then be able to issue option certificates to your option holders.
To do so, head back to the Share Options window and click on the Option Certificates tab.
You'll then see the option certificates for your option holders. Hit Sign All for all of your Option Certificates, and Actions: Email Certificates to send them out to your options holders.
This short video takes you through Option Certificates on SeedLegals.
6. Notify HMRC of your option grants
Any grants made on or after 6 April 2024 only need to be notified to HMRC once a year along with your EMI Annual Return by the 6th of July every year. Our guide here will take you through just how to do so.
However, we strongly urge companies to report regularly, such as once the options are granted. Instead of waiting until the deadline to make the notification, to avoid the risk of missing the filing.
7. Joint NIC Election
This needs to be done before the exercise of any options, but you may wish to do so earlier so that you don't have to worry about it in the future.
Our guide here takes you through how to submit a blank election, together with a fully signed option agreement to HMRC for approval. This only needs to be done once, meaning once it has been approved for a single option holder, you will be able to sign other NIC Elections for the rest of your option holders without seeking separate approvals.
Our short video here takes you through how to navigate the NIC Election on SeedLegals.
8. The team will complete a final review of your scheme
Please reach out to your dedicated Options Scheme owner so they can help review your option grants to ensure everything is in order.
If you have successfully followed all of these steps then congratulations, you will have successfully completed your EMI options scheme. Which you can view at any time from the Share Options window on your dashboard.
As always with SeedLegals - we're here to support you every step of the way - so if you get stuck or need a bit of help - hit the chat on the bottom right.