When granting options under an EMI Option Scheme some things need to be done in a certain order and within a strict time limit.
EMI Valuations are usually valid for 90 days*
Valuations for EMIs are usually valid for 90 days* from the date of the agreement. You may be able to extend this agreement period for a further 30 days by writing to the HMRC EMI team ("SAV"). Include written confirmation that no significant events have happened since the original valuation or are likely to happen in the period for which you’re asking for the extension.
EMI options must be granted within 90 days*
A company must grant a option within 90 days* of receiving an EMI valuation for that option to qualify for the agreed valuation.
Any options granted after that will not be covered by that valuation, and the company and employee could end up with hefty tax liabilities when the option is exercised later - so after that 90 days has elapsed you'll need to request another valuation before issuing the next batch of options.
Employees have 7 days to sign their Option Agreement
The employee must return the signed Option Agreement within 7 days to the Company.
You must inform HMRC within 92 days of an options grant
You must tell HMRC about a grant of an EMI option within 92 days of the date of the grant under schedule 5 Income Tax (Earnings and Pensions) Act 2003.
If you don’t tell HMRC about the grant within 92 days, you risk losing any tax benefits for you and your employee.
You must do an annual return before 6 July
The Company must complete an online end-of-year return on or before 6 July for each registered EMI scheme.