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Taxation

Share Option Schemes

If you’re looking to incentivise, motivate and retain employees, a share option scheme may be key for your business. At Edwards Accountants, we can help provide advice on setting up a scheme like this, allowing you to grow and develop your business while boosting employee engagement at the same time.

 

What are share option schemes?

A share option scheme is when an employer grants employees the right to acquire shares from the company at a specific time and a pre-agreed price. This allows the employee to be rewarded for the growth of the business, incentivising their own contributions to the company.

There are two ways in which an employer can allow employees to obtain shares without suffering a large tax bill:

  • Enterprise Management Incentives (EMI)
  • Share Incentive Plans (SIPs)

EMI allows selected employees (often key to the employer) to be given the opportunity to acquire a significant number of shares in their employer through the issue of options. A SIP is designed to allow all employees to participate in their business and to encourage long-term shareholding by them.

 

Can my business qualify for share option schemes?

There are a number of issues to consider in deciding whether EMI is suitable for your company.

  • Does the company qualify?
  • Which employees are eligible and who should be issued options?
  • What type of shares will be issued?
  • When will the rights to exercise options arise?

 

How will my business benefit from share option schemes?

In order to maintain job satisfaction, employees need to feel valued and appreciated. Feeling as though their own contributions to the business as a whole are benefitting them is a great way to boost employee engagement and motivation.

Not only do these schemes boost employee engagement and satisfaction, but setting up a share option scheme can help your employees to better understand the values and intentions of your business’ shareholders, allowing everyone to work together towards a common goal.

 

How Edwards Accountants can help

As a team of experienced tax advisors, we can provide in-depth corporate and personal tax advice on setting up share option schemes, as well as supporting you with personal tax advisory services and advice on corporate tax planning.

We have extensive knowledge and experience in optimising share option schemes for a range of businesses, helping them choose the right one to meet requirements each and every time.

If you’d like to find out more about setting up a share option scheme for your business, or want to know more about our personal tax planning services and business advisory services, get in touch with us today.

 

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