Employment related share schemes

There are a number of government approved share schemes which offer various incentives to employees. The rules of the schemes vary but they are all designed to help incentivise employees by giving them the opportunity to invest in their employer's business. This in turn assists businesses retain and recruit key staff and offers tax efficient benefits to staff.

They can be tax advantaged or non-tax advantaged. The tax approved schemes are Share Incentive Plans (SIPs), Save As You Earn (SAYE) schemes, Company Share Option Plans (CSOPs) and Enterprise Management Incentive (EMI) schemes.

HMRC has recently published statistics on the tax advantaged employee share schemes for 2021-22. In the period, employees received an estimated £840 million in Income Tax relief and £560 million in National Insurance contributions relief. The total number of companies operating Employee Share Schemes in the 2021-22 tax year was 18,630.

Certain employers offer employee share schemes which are not approved by the government. The purchase of shares in unapproved share schemes are subject to the usual tax rules.

If you need support setting up an employee share scheme, email us or give us a call on 01380 723692.