Employee share schemes


Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

  • An employee share scheme can be highly effective for an employer in both attracting and retaining the best talent.
  • A well-designed scheme should align employee and company interests.
  • However, careful planning is essential if one also wants to remain efficient for tax purposes and avoid falling out with the tax man.
  • There are broadly two categories of Employee Share Scheme (“ESS”) available:
  • ‘Approved’ schemes
  • ‘Unapproved’ schemes
  • Approved schemes include Company Share Option Plans (“CSOPs”), Enterprise Management Incentives (“EMI”), Share Incentive Plans (“SIPs”) and Save As You Earn (“SAYE”). These are usually afforded statutory tax reliefs that make the acquisition by employees and the award by employers efficient for tax purposes.
  • Unapproved plans, such as Growth Share Plans, Long-Term Incentive Plans and Unapproved Share Option Schemes. These are not approved by HMRC – which isn’t the same as disapproved of. However, they do not offer the same types of statutory tax reliefs that are usually on offer for approved schemes.
  • That said, it still may be possible to put together such a scheme that meets the employer’s objectives in a tax efficient manner but be subject to less stringent conditions that follow the approved schemes.
  • If you are interested in exploring employee share schemes then please get in touch.

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