EMI – Eligible Employees

8 June 2022

The working time requirement is based on the average working time of an employee.

advice : Employment and Tax

The Enterprise Management Incentives (EMI) scheme is the UK Government scheme that helps small businesses to incentivise, retain, and attract new talents. Find out more about how this scheme works on our website.

For employees to be eligible for the EMI option, they are required to spend:

  • at least 25 hours each week working as an employee for the company or for a qualifying subsidiary, or
  • if less working fewer hours, 75% of their total working time (the 75% requirement),

This working time requirement is based on the average working time of an employee. Therefore, it is applicable to employees with varying hours if the average working time meets the requirements.

When checking employees’ eligibility with the 75% requirement, all remunerative work, including employment and self-employment should be taken into account. For examples please visit Gov.uk website.

The employment includes service contracts, apprenticeship contracts, and any service under the Crown. Remunerative work is any work from which the income received is taxable as employment income or any work undertaken as a self-employed person with a view to profit. The earnings and profits are taxable in the UK or would have been taxable if the employee were resident in the UK.

When calculating working time, if an employee wasn’t working due to the reasons, that time is also included:

  • injury
  •  ill-health
  •  disability
  • pregnancy or childbirth
  • parental leave
  • reasonable holiday entitlement,
  • Period of notice of termination of employment

From March 2020, for employees who were not able to work for reasons related to the COVID-19 pandemic, the time which they would have spent working in the company otherwise, was also calculated as working time. The reason may include:

  • Being on furlough
  • Working reduced hours
  • Being on unpaid leave

Both, the employer, and the employee should retain documentation to prove this.

From April 2022, the easement which provides an exemption from the working time required for employees affected by COVID-19 is no longer available.

More information on employee eligibility can be found on Gov.uk website.

Nothing on this page is intended to be or should be construed or taken as accountancy, investment, tax or any other kind of advice. We recommend individuals and companies seek professional advice on their circumstances and matters.