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The impact of furlough on EMI options

Many businesses have decided to make use of the Government’s Coronavirus Job Retention Scheme and, no doubt, others will follow suit.  There is, however, currently some uncertainty about whether putting employees on furlough could have an adverse impact on their EMI options. 

One of the conditions to be met for qualifying EMI status is that the optionholder must work at least 25 hours per week, or if less, 75% of their working time with the company (or holding company of the employing company if appropriate) which granted the EMI options. If an EMI optionholder is furloughed they will not meet that working time requirement and it is likely that their options will lapse.

Guidance is being sought from HMRC on this point but until clarification is forthcoming this is likely to be a relevant factor in any decision taken about furloughing by companies that have issued EMI options and holders of EMI options.


These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.

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