5. What are the benefits of tax efficient employee share schemes?

24th November 2023

There are benefits for both employers and employees when it comes to employee share schemes, as it can help both parties save on tax payments.

For employers specifically, schemes like EMI will not cost the employer directly unlike paying extra salary, and there will also be no National Insurance charges (NICs) when the shares are granted or sold. Companies can also benefit from a tax deduction roughly equal to the benefit the scheme has brought employees.

For employees, the main advantage is that any money they receive from the sale of shares is subject to Capital Gains Tax at 10% rather than Income Tax at 40%. This can help improve employee engagement and retention at your company.

We help our clients with EMI scheme valuations, set up, and maintenance to ensure that you and your employees are getting the best that you can out of these schemes. To find out more, download our factsheet on EMI investment schemes or get in touch with a qualified tax specialist.