Question 1

What is an Unapproved Option Scheme?

Accepted Answer

An unapproved (non-tax-advantaged) share option scheme that can be granted to anyone — contractors, freelancers, advisors, overseas staff, and non-executive directors. Unlike EMI, there are no HMRC qualifying conditions or company-size limits.

Question 2

What are the tax implications?

Accepted Answer

Income tax and NIC are due on the difference between the exercise price and market value at the time of exercise. CGT applies on any gain between exercise and sale. Despite less favourable tax treatment than EMI, unapproved schemes are the only option for non-employees.

Question 3

Can I combine EMI and Unapproved schemes?

Accepted Answer

Yes. Most startups run both: EMI for qualifying UK employees (for tax efficiency) and Unapproved for everyone else. eSignHub manages both scheme types from a single dashboard.

Question 4

What documents are auto-generated?

Accepted Answer

The platform generates Scheme Rules, individual Option Agreements, Board Resolutions, Exercise Notices, and tax reporting templates. All documents are customisable and ready for e-signature.

Feature	EMI	Unapproved
Tax advantages	Significant — no IT/NIC on grant/exercise	Limited — taxed as employment income
Eligible recipients	UK PAYE employees only	Anyone — contractors, overseas, advisors
Company size limit	≤250 employees, ≤£30M assets	No limit
HMRC valuation required	Yes — VAL 231 submission	No — but recommended
Setup complexity	Higher — HMRC approval needed	Lower — immediate setup

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Why Unapproved Schemes?

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