Complex-rules-around-share-schemes2

Employee share schemes not just for large companies

Author: Inez Anderson

Categories: Business Strategy, Employees, Features, Share Schemes
Tags: corporate tax, employee rewards, tax relief
Inez Anderson: "We’re seeing legislation coming in to really encourage share ownership and participation in smaller businesses.  So that’s the one everybody would like but not everybody can qualify for because of the huge tax advantages.  We can then go to larger schemes like...schemes you may see in larger companies, that are called Save as You Earn or share incentive plans.  And they’re all employee schemes; you’ve got to invite all your employees to join.  And it’s schemes like that, that over the years have hit the headlines when we have seen things like, you know, Asda or Tesco employees taking home so many thousands of pounds through the share scheme, it’s been an all employee share plan.  The bad news about these headlines is lots of companies think these are only good if I’ve got tens of thousands of employees.  And that’s not always the case.  You can very much look at that as an incentive arrangement for all sizes of organisations.  And I think it would be good for more employers to be thinking about them and how they might fit in to their overall reward package.  There’s one other revenue approved scheme I’ve not mentioned which is called a CSOP – Company share Ownership Plan.  You award somebody an option over shares, but it’s not nearly as tax efficient or can you give shares over ... options over as many shares as you can under an EMI scheme.  So CSOPs are normally looked at if you don’t qualify for an EMI.  But again, very tax efficient, and companies should be making, I think, more use of them."
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