Does an employee who is furloughed lose his/her benefits under an EMI share option?
One of the key legislative requirements of EMI is that the employee satisfies the working time requirement, which is that they work at least 25 hours per week in the company or, if less, 75% of the employee’s total working time. If the working time requirement ceases to be met, then there is a “disqualifying event”. That means that the tax benefits of EMI ceases. It may also mean that the option lapses, but that depends on the specific terms of the option.
An employee who has been furloughed is by definition no longer working 25 hours/week and therefore on the face of it, there is a disqualifying event. However, the Government has tabled an amendment to the Finance Bill currently going through Parliament providing in effect that time not worked because an employee has been furloughed counts as working time, both for determining whether the working time requirement is met initially and whether there is a disqualifying event. Provided this amendment is enacted, this should address the issue.
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The best advice is that parties should proceed as they would have done before the crisis began.
Companies House guidance on the impact of coronavirus on their services can be found at: https://www.gov.uk/guidance/coronavirus-guidance-for-companies-house-customers-employees-and-suppliers
This flexibility offered by Companies House could be a useful short-term help to businesses that are struggling to deal with the impact of the Covid-19 outbreak, but be sure to take action in advance of your filing deadline.
Your lawyers can take your instructions by telephone, Skype, Zoom or a similar tool. However, the formal requirement to make a valid Will requires two witnesses to be present with you when you sign the Will and they must then add their signatures. The witnesses or their spouse cannot be beneficiaries or they will forfeit their inheritance.
The main challenge is how to have your witnesses with you at a time when we are being advised to socially distance. One option would be for the witnesses to stand outside your window or at a safe distance from you where they have a clear line of sight. The witnesses can watch you sign and then you could post your Will through your letterbox or leave it on a surface for them to pick up so that they can then sign their names too. If the witnesses live together then they do not need to keep two meters apart from each other.
The Wills Act 1837 requires that your witnesses must be physically present when you sign your Will and therefore it is not possible to do this by Skype, Zoom or similar video conferencing means. You may however want to video record the process by which you and your witnesses signed your Will so that you have a record of what was done, particularly if you are worried that someone might challenge the validity of your Will in due course. You can of course re-execute your Will once social distancing has been relaxed if you are particularly concerned.
Be aware that the virus can remain on documents for more than 24 hours so it would be sensible for everyone to wear disposable gloves and in any event to wash hands thoroughly after handling the Will.
Emergency legislation may be passed regarding the requirement to make a valid Will but you must follow the current rules unless or until new legislation is passed.
The financial implications of having to repay all deposits and advance payments could be very serious for some businesses. As an alternative to a refund, many are offering customers the opportunity to re-book at a later date, or a voucher that can be redeemed against a subsequent booking.
The CMA’s view on this practice is that consumers can in many situations be offered alternatives of this type, but they should not be “misled or pressured” into accepting this. Their view is that a refund should be an option that is just as clearly and easily available. The CMA also points out that any restrictions that apply to credits, vouchers, re-booking or re-scheduling, such as the period in which credits must be used or services re-booked, must also be fair and made clear to consumers.
The full CMA guidance re “The Coronavirus (Covid-19) pandemic, consumer contracts, cancellation and refunds” can be found here.
The reaction from NCVO is that this is an important first step. However, it will not stop well run charities from closing and others will look very different in a few months’ time.