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HMRC Employment Related Securities Bulletin June 2020: Full-time working qualification for CSOP and valuations for EMI schemes

The latest Employment Related Securities bulletin issued by HMRC deals with the impact of COVID-19 on Enterprise Management Incentive (EMI), Save as you Earn (SAYE), Company Share Option Plans (CSOP), Share Incentive Plan (SIP).

Two important announcements were made in respect of the full-time employment requirement for CSOP and valuations for EMI schemes agreed with HMRC.

Full-time employment requirement for CSOP

One of the qualifying criteria for HMRC approved share option schemes (including CSOP and EMI) is that options can only be granted to employees or directors who work for at least 25 hours a week, or, if less, at least 75% of their working time must be for the company.

Where there is a CSOP in place, HMRC accepts that where employees and full-time directors have been granted options before coronavirus, but are now furloughed due to coronavirus, their options will remain qualifying on the basis they were full time directors and qualifying employees at the time of grant. Interestingly there is no corresponding announcement in respect of EMI schemes, though HMRC have commented that they are exploring issues raised by stakeholders in relation to coronavirus and EMI and will provide updates as soon as possible.

EMI valuations agreed with HMRC

When EMI options are ready to be granted it’s possible to contact HMRC and agree an appropriate valuation. Where valuations are agreed by HMRC the options currently need to be granted within 90 days.

Coronavirus may lead to situations where there have been delays in granting EMI options which takes people over the 90 day period. Provided that there has been no change that may affect an appropriate value then:

  • any EMI valuation agreement letters already issued, where the 90 days expires on or after the 1 March 2020, can be automatically treated as being extended by a period of 30 days; and
  • any new EMI valuation agreement letter issued on or after 1 March 2020 will be valid for 120 days.


Care needs to be taken that there have been no changes in the company’s circumstances that may impact on the value agreed.

Should you wish to discuss anything mentioned above in more detail, please do not hesitate to contact either Iain Wright or Amanda Allen.


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