Income Tax Act 2007 section 186A

The number of employees requirement

Section 186A sets out the maximum number of full-time equivalent employees a company (or group) may have at the time it issues shares under the Enterprise Investment Scheme.

• A standalone company must have fewer than the permitted limit of full-time equivalent (FTE) employees when the relevant shares are issued; for a group, the FTE numbers of the parent and all qualifying subsidiaries are added together and the same limit applies.
• The FTE employee number is calculated by counting full-time employees and adding a just and reasonable fraction for each part-time employee.
• The permitted limit is 500 FTE employees for a knowledge-intensive company, and 250 for any other company; the Treasury may change these figures by regulations.
• For these purposes an employee includes a director but excludes anyone on maternity, shared parental or parental bereavement leave, and students on vocational training.