tiintax

Next week I’ll be starting a PhD at the Law Department of the University of Sheffield.  My current topic title is Tax Simplification and Better Regulation, and so the question of what is an academic and how we recognise and reward academics is one which I expect will be increasingly close to my heart.

So, full disclosure made, let’s now turn to the consultation on Enterprise Management Incentives: Extending Access for Academic Employees.  Woo hoo!

OK, well the government is quite clear it doesn’t want any of your faffy-abouty dissertations around the subject.

1.15 The Government is not seeking views during this consultation on broader issues, such as:

 whether there are employees other than academics for whom the present EMI working time requirement should be relaxed;

 the limits that apply to the value of EMI options that may be held by an employee or granted by a company;

 the requirement that EMI options may only be issued to employees of a qualifying company or group; or

 the features or requirements of any tax advantaged employee share scheme other than EMI.

So there! “This consultation is only concerned with the limited issue of allowing access to EMI for certain academic employees who do not currently meet the working time requirement.”

Basically what it seems to be about is a scheme to let small companies attract and retain talent by awarding shares to their employees without having to pay tax and national insurance on them.

EMI is a popular and successful scheme which each year enables around 20,000 employees to obtain options over shares with a total value of around £250 million, and provides tax advantages on exercise of these options of around £200 million.

But – to prevent the scheme being used as an avoidance device – there are rules to ensure your employee is an actual employee (and not a potential tax avoiding investor who “works” for you for half an hour a month at the minimum wage).  And these rules seem to mean that academics who do work for this kind of company sometimes come up against problems because of course their contract with their academic institution will usually mean most of their time is already spoken for.

You can see the point.  What we want is for scientists to take their brilliant ideas and turn them into brilliant businesses as well.  So let’s not faff about: give them the relief.  Agreed?  Good.

All right then.

So why are we doing it by way of a formal written consultation?  Why aren’t we doing it under the HMRC “care and management” powers – simply tell HMRC staff to stop faffing about trying to find ways that an academic working for an EMI scheme might NOT qualify.

Or why aren’t we setting up an expert working party with some actual academics who are or have been involved in EMI schemes to thrash out the definitions, like we’re doing with the creative industries consultation I wrote about yesterday?

Why haven’t we got any idea of the scale of the problem being addressed  – the impact assessment says helpfully that:

This measure is expected to have a cost, the magnitude of which will depend on the outcome of this consultation.

Why haven’t we got anyone in HMRC or HMT who looks at these documents before they go out and says “look, Fred, Freda, I see what you’re getting at, but have you seen what they’re doing in the Creative Industries team?  Couldn’t you try something like that?”

So this is another consultation I don’t propose to respond to.  Because when your first question is

Can you provide details and evidence on the typical working patterns and arrangements of academic employees engaged by EMI qualifying companies – for example, whether this involves a regular and permanent weekly commitment of time, or whether working time is concentrated at particular times of the academic year?

wouldn’t it occur to you that there are people who would know?  And wouldn’t it be a good idea to ask them?

How much does it cost to do a formal consultation, do you think?