There are a number of tax efficient ways in which companies can incentivise employees.
One of the most popular incentives is the granting of shares or share options, which enable employees to participate in the future growth of the company. This can be essential to helping small, higher risk companies to attract, retain and motivate key employees. We can advise on:
EMI share option schemes are particularly advantageous, giving employees the option to acquire shares in the company at a fixed price, free from the income tax and National Insurance Contributions (“NICs”) that would usually apply. The employer has full discretion as to which employees are granted options, as well as the conditions on which an individual is able to exercise their options, and acquire shares. Please see our EMI factsheet for further details.
Our tax specialists have extensive experience in establishing share schemes and are able to advise on all aspects of the arrangements, including tax requirements, share valuations, exercise conditions and online reporting requirements (including ongoing compliance).
We are also able to advise on other employee incentives, including tax efficient benefits, salary sacrifice and pension contributions.