Why the Valuation Is the
Most Critical Part of Your EMI Scheme
An EMI scheme lets you grant employees share options at a fixed strike price. The tax advantages are significant — but they only apply if the strike price is set correctly, and HMRC has agreed the value of the shares.
The Tax Case for Getting It Right
When an employee exercises their EMI option, they pay Income Tax on the difference between the exercise price and the market value at the time — but only if the option was granted at or above the Actual Market Value (AMV) agreed with HMRC.
If the option is granted at a price below the agreed AMV, the difference is treated as employment income immediately, removing the tax advantage entirely. Getting the AMV wrong does not just create an admin problem — it can wipe out the scheme’s core benefit for the employee.
What HMRC SAV Actually Does
HMRC’s Shares and Assets Valuation team reviews EMI valuation submissions and either agrees the value or proposes an alternative. You are not obliged to submit — but without a written HMRC agreement, your strike price is unprotected.
We prepare the valuation report and submit it to HMRC SAV directly on your behalf. Once agreed, the value is locked in for 90 days — meaning you can grant options to employees with full certainty about the tax treatment.
AMV vs UMV — What Both Values Mean
The value of the shares taking into account the restrictions attached to them — typically minority discount, drag-along provisions, and transfer restrictions. This is the value used to set the option strike price. It is usually lower than the UMV, which is why it benefits the employee.
The value of the shares as if no restrictions existed — effectively the full open market value of a freely transferable share. The UMV is the upper limit of the agreed value. HMRC uses both figures when agreeing the valuation and they must both be included in your submission.
From Enquiry to
HMRC-Agreed Value
Most EMI valuations complete within five to ten business days of receiving your financial information. We then submit directly to HMRC SAV, who typically respond within two to four weeks with a written agreement.
Initial Conversation
We discuss the structure of the scheme — number of employees, option pool size, vesting schedule, and any share restrictions in your articles. We confirm a fixed fee and send you our document request list.
Valuation Analysis
We review your accounts, build the valuation model, apply relevant discounts for restrictions, and produce both the AMV and UMV figures with full supporting methodology.
HMRC SAV Submission
We prepare the full submission pack and send it directly to HMRC Shares and Assets Valuation on your behalf. You receive a copy of everything submitted.
HMRC Agrees the Value
HMRC typically responds within two to four weeks. Once agreed, you have 90 days to grant options at the agreed strike price. We handle any queries from HMRC SAV as part of the engagement.
Who Uses Our EMI Valuation Service
Founders and directors setting up an EMI scheme for the first time and needing a valuation and HMRC submission handled end to end
Businesses refreshing their EMI scheme — when 90 days has passed and a new HMRC-agreed value is required before granting further options
Solicitors and HR advisers who need the valuation and HMRC submission to sit alongside the legal documentation they are preparing
Fast-growing SMEs that need an EMI valuation quickly — pre-fundraise, before a new hire joins, or before a planned restructure changes the cap table
Key EMI Eligibility Conditions
The company must have gross assets of no more than £30m
Fewer than 250 full-time equivalent employees
The company must be independent (not a subsidiary or 51%+ controlled by another company)
The company must carry on a qualifying trade (most UK trading SMEs qualify)
Each employee must work at least 25 hours per week or 75% of their working time for the company
We will confirm eligibility during the initial conversation. Your solicitor should also advise on the legal conditions.
What We Produce and
Submit on Your Behalf
The full valuation report plus the complete HMRC SAV submission pack. You do not need to deal with HMRC directly at any point.
Full Valuation Report
A signed, documented valuation report covering the company background, financial analysis, valuation methodology, and both the AMV and UMV conclusions. ICAEW Chartered Accountant signed.
Financial Model & Workings
The underlying DCF and earnings model, normalised for owner-related costs, with documented assumptions. This forms part of the HMRC submission and supports the AMV and UMV conclusions.
HMRC SAV Submission
We prepare and submit the complete HMRC Shares and Assets Valuation pack on your behalf, including all supporting documentation. You receive copies of everything sent.
HMRC Query Management
If HMRC SAV comes back with questions or proposes a different value, we handle the correspondence and negotiate on your behalf as part of the fixed fee engagement.
Kishen Patel
Founder, Consult EFC · BFP ACA
ICAEW Chartered Accountant. Big Four trained at Deloitte. 12+ years across Investment Banking, Big Four audit, and UK SME corporate advisory. Personally leads every EMI engagement from first call to HMRC agreement.
Why HMRC SAV
Accepts Our Reports
HMRC SAV reviews thousands of EMI valuations every year. They have seen every approach and they know immediately when a report has been produced by someone who understands valuation methodology versus someone who has populated a template.
Our reports are produced to ICAEW professional standards with full methodology, documented assumptions, and comparable transaction evidence. They are prepared in the format HMRC SAV works with, which means fewer queries, faster agreement, and no back-and-forth that delays your scheme launch.
Because Kishen handles every engagement personally, there is no handoff between analyst and reviewer. The person who understands your business inside-out is the person dealing with HMRC if any questions arise.
“Setting up an EMI scheme felt daunting until we found Consult EFC. The valuation was handled entirely professionally, Kishen kept us informed at every stage, and HMRC accepted it without challenge. Exactly the kind of expert we needed.”
Frequently Asked Questions
Ready to launch your EMI scheme?
Let’s get the valuation done.
No obligation. Fixed fees. HMRC submission included. Response within one business day.