Employee Ownership Trusts
The Employee Ownership Trust (EOT) was introduced to the UK in 2014 in an attempt from the Government to promote employee ownership of businesses. In short, EOT is a business...
If you’re a growing small company, and you’re struggling to match competitive market rate salaries for staff, you might want to consider using Enterprise Management Incentives (EMIs).
With EMIs, you can pay your employees with shares options in your company. These share options will give the employees the right to buy shares in the future at a price that is fixed today. If the value of the company increases over time, the employee is then entitled to buy discounted shares, and thus make a profit.
As an example, if you have to hire an industry specialist, where the market rate salary is approximately £75,000, but you can only afford to pay them £40,000 at the moment, you can use EMIs to offer them discounted shares. If this employee accepts the offer, and helps the company grow over the next few years, they could make a lot more money compared to having a £75,000 fixed salary.
This is an excellent incentive which makes it easier to hire and retain key staff members at an early stage in your business. It’s particularly attractive to smaller startups that require specialized staff to grow.
It’s also important to note that employees with share options will have the choice of buying shares in the company in the future. This means that if they lose faith in the company, or the value of the company decreases, they can choose not to buy the shares.
To be able to take advantage of EMIs, the company has to have assets worth less than £30 million, have less than 250 employees, and be permanently established in the UK. There are also other limitations, like certain industries that are excluded from the scheme.
The great news is that you can design your company’s EMI scheme however you like. You could decide that employees have to stay in the company for a certain period of time before being granted share options, or that employees lose their share options if they leave the business.
We recommend that you seek advice from an expert to help you decide whether EMIs are the right choice for your business, and to help you design EMIs that suit your needs.
At Pentins we have excellent experience in assisting businesses with EMIs. Our approach to accounting allows us to work closely with your company, which gives us an unparalleled ability to give you the best advice tailored to your situation.
In addition to helping you set up EMIs, we can also advise you on other tax relief options, such as EIS or Research and Development, cashflow advice and other accountancy services.
If you would like to discuss how we can help you, or to find out whether EMIs could be right for your business, book a free call with one of our expert advisors today.
The Employee Ownership Trust (EOT) was introduced to the UK in 2014 in an attempt from the Government to promote employee ownership of businesses. In short, EOT is a business...
There are many reasons why someone might decide to close their company. Because a limited company is an entity in itself, the process of closing it down could be more...
There are good reasons for hiring an accountant at all stages of your company’s growth. From a business plan to company formation, loan application to tax investigation, an accountant can...
Starting a new business can be exciting and nerve wrecking. Many new business owners will have moments of doubt where they worry about whether their venture will work, and it’s...
The first step to avoiding pitfalls is to know where they are. To help you out, I have compiled a list of the most common mistakes that business owners make,...
Starting and growing a business often requires some type of financial investment. There are many ways to raise money for your start-up, but choosing the right method for your business...
If you’re ready to expand your business coverage area, or to open a second location, setting up a franchise business can be an excellent choice. In this article we will...
Every business owner has to exit their business at some point. Whether you’re hoping to sell your business for a profit, work until you retire, or otherwise, you will eventually...
The Enterprise Management Scheme (EMI) is a share option scheme which allows smaller companies to pay employees with equity and shares in the business. This can work really well for...
Some business owners see their accountant as an individual that can provide a simple set of services. Their accountant does their tax returns and payroll, that’s it. And unfortunately, they...
In some circumstances, a company can be left with no directors. This can happen for example if a sole director chooses to resign from the business, or if all directors...
There are several reasons why you could want to resign as director of a company. Maybe you wish to retire, or focus your efforts elsewhere. You might not enjoy your...
Setting goals for your employees has proved to be highly beneficial. It can drive your business forwards, and help you reach your business goals. Additionally, it has been proven that...
EIS, or Enterprise Investment Scheme, is a very popular government scheme which makes it easier for businesses to raise money. In short, this scheme offers tax reliefs to investors who...
The two most common business structures in the UK are Limited Company and Sole Trader (also known as self employed). Choosing the right business structure is incredibly important. In some...
As more businesses are implementing flexible working hours, remote working is becoming increasingly popular. It has been proven that some workers thrive when they can do their jobs in an...
Whether you are looking for an increase in future income, or future growth in value, here are 15 ways to increase the value of your business. First, let’s talk about...
As a business owner, this is probably what you want: a stable stream of satisfied customers, who return to your business and keep buying your services or products. They leave...
To achieve goals, you have to set them. You might have long term visions and dreams for you business, but writing a business plan and specifying these goals, is the...
Nothing is worse than running out of cash. The stress of having a negative bank balance, struggling to pay salaries or invoices on time, and not being able to cover...
With Christmas approaching, your business might be planning your annual staff Christmas party. As a business owner, you should get familiar with staff Christmas party tax and VAT consequences. This...
Starting a new business is both exciting and challenging. As a new business owner, you probably dream about running a successful and thriving business. You are most likely focused on...
We are very proud to announce that we are British Accountancy Awards 2019 finalists! Pentins have been shortlisted in the category Small Practice Innovation of the Year. We are being...
Growing your business is not a small feat. It’s so easy to get caught up in the day-to-day activities and leave the big picture stuff for later. However, if the...
The profits of your business are what you are left with after receiving your payments and paying off your expenses. In short, Sales – Cost of Sales = Profit. A...
When starting a company with more than one shareholder, it is advisable to make a Shareholders’ Agreement. This is a good way to further regulate the way shareholders conduct business...
Every startup needs money to get off the ground. Whether it’s for some basic office equipment, office space or for more advanced machinery, there’s a lot to consider financially. Either...
In today’s ever-changing business landscape, business owners are often faced with tough decisions, stagnation and no sense of direction, which often prompts them to hire a business coach, in hopes...
The Taxman allows companies to pay for a director’s or employee’s mobile phone without it counting as a taxable perk. However, there are conditions which HMRC strictly enforces. How can...
In many countries, governments offer tax incentives to encourage investment in business, aiming to promote national economic growth. The UK has several tax incentives, but the most common for entrepreneurs...
Could it be that your mindset is derailing your success? Any doubt about whether you can or can’t do something will certainly hold you back. Take your foot off the...
You’ve set up a company to run a new business venture. It’s risky and may come to nothing. In the meantime the company is incurring significant costs. Can you recover...
With the end of tax year fast-approaching, Pentins offer some last minute tax-saving advice before April 2019. Director shareholders – salary The personal allowance for 2018/19 is £11,850. Anyone with...
Auto Enrolment Pension Contributions due to increase, in line with legislation, with effect from 6th April 2019. What is Changing? Auto Enrolment duties are an important part of all UK...
Did you know? As the National Minimum and National Living Wage will increase on 1 April 2019, the ideal time to find out how this will affect your business is...
With the March deadline only days away, there is still uncertainty around what Brexit will mean and planning for a “No Deal” scenario seems sensible right now. Businesses that trade...
From April 2019, the way landlords and businesses handle their bookkeeping & accountancy will be transformed with the introduction of Making Tax Digital. After the deadline, all VAT registered businesses...
FROM APRIL 2019 HMRC IS GOING DIGITAL Eventually, all your income and allowances will be kept in the digital account that HMRC are setting up to calculate your tax liabilities....
I grew up in tough economic times, in the late seventies and early eighties, in a relatively depressed area of the United Kingdom (Wallsend, Tyne, and Wear). (Note: there are...
It is proven that the fastest and most effective way for any business to realise its maximum profit is to get its pricing right. The right pricing structure can boost...
R&D tax credits is one of many ways that we help our clients to reduce their tax bills. If your business works on a research & development project, we urge...
Tax avoidance can be a tricky subject. No business owner wants to pay more tax than required, but at the same time we have to acknowledge that paying tax is...
Rational choice theory has traditionally told us that humans are rational creatures making rational choices. This view was changed in Dan Ariely’s book Predictably Irrational (2008). Ariely describes research which...
We are using cookies to give you the best experience on our website.
You can find out more about which cookies we are using or switch them off in settings.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.