HMRC extends EMI valuation period

Picture of a client meeting
Justine Ricommini By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)

9 April 2019

On 2 April 2019, HMRC updated its guidance in relation to the valuation validity period for Enterprise Management Incentives (EMI).  Justine Riccomini explains.


Where an employer decides to operate an EMI as a form of reward for its employees, there are certain occasions on which the share value needs to be agreed with HMRC’s Shares and Assets Valuation unit.  An example is the granting of EMI share options. The share valuation was valid for 60 days from the date the value is agreed by HMRC, but then lapsed. After the lapse, further work would need to be undertaken to prepare a second agreement, propose a revised value for the shares and obtain a second valuation, unless HMRC could be persuaded that extenuating circumstances existed to extend the 60-day time limit.

New time limit

From 1 April 2019, the guidance on GOV.UK has been changed to reflect a new time limit of 90 days, which is being welcomed by employers and advisers alike.This additional month should offer enough breathing space for the final workings to be implemented by the employer without the time limits being breached and extensions sought. N.B. The notification to HMRC of the grant of share options by the employer remains at 92 days from the date of grant.

Seeking an extension

The revised guidelines are silent on the matter of seeking extensions – and this is probably because HMRC wishes to discourage the practice. However, even though the time limit extension will undoubtedly ease the process for many, there may still be occasions when extenuating circumstances arise. In such situations, I imagine that each will be judged on its respective merits.


HMRC has confirmed that the current state aid deal in place for EMI will continue until 6 April 2023 unfettered by the uncertainties experienced for a week in April 2018, when state aid approval lapsed and was then renewed by the EU. After 6 April 2023 HMRC has stated that EU state aid rules will be transposed into UK law under the EU Withdrawal Act, so state aid will not be affected. If a deal is reached, then EU approval of state aid will simply continue.


This time limit extension for valuations of EMI shares will be welcomed by the tax profession and is likely to be of great assistance when planning EMI option schemes with clients. The reassurances from HMRC around the Brexit position also offer comfort.


  • Tax

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