[varispeed]

Aren't EMI options basically a scam? I never understood why company cannot just give an employee real shares. I was at a start up a couple of years ago and was promised these. Basically every month CEO had a new excuse that HMRC this or HMRC that. After a year and a half I decided to leave, because I understood I would never get any of that. Now when I see company offering EMI shares it is a clear red flag for me. E.g. if you offer £50k in EMI shares just pay a lump sum instead and I can put this on my ISA tracking fund or just give real shares in the company.

[IneffablePigeon]

EMI gives both tax advantages and means you owe no tax when being offered the option. 50k as a lump sum would be taxed as income (so, fairly heavily). 50k in shares might attract a similar tax bill to be paid directly by the employee far in advance of any chance of recouping the value of the shares.

EMI itself is not a scam. Whether a company follows through on giving you the options in a reasonable timescale is another thing, and whether the shares are eventually worth anything is another again. As with all things startup option/share related, consider it a lottery ticket with an unknown chance of paying out.

[varispeed]

So this is a sort of HMRC sanctioned tax avoidance scheme. Given that they are in a business of enacting retrospective taxes, I wouldn't trust that they are not going to change their mind down the line and ask for an extra tax.

That being said, £50k after all the tax is still better than £0 and if the £50k was paid as a one off bonus, you could pay it into SIPP without paying tax.

I remember when I asked them why I cannot get normal shares? They said that EMI will be better for me because I will save on tax. I said, why if I want to pay tax, it pays for our schools, hospitals, why should I be taking the advantage? So they said that the board don't want to do that, because it will create "a legal issue" when they will be looking for next round of investments.

So if any future employee reads that, if a company insist on EMI shares and don't want to give you real shares or money upfront, then jump the ship!