The competition for talented staff is stiffer than ever. However, employee share schemes may offer an appealing employee reward solution for businesses struggling to attract and retain their personnel.

When it comes to enticing and holding on to key members of a workforce, a common challenge for small and medium-sized employers is competing financially with large companies.

Share-based remuneration offers a potential solution to overcome this obstacle, with the initial cash cost being generally modest, and employees well compensated for their contribution to business growth.

What are the options?

HMRC’s most common approved scheme is Enterprise Management Incentives (EMIs). From a tax perspective, the EMI scheme is very attractive and very flexible. Other HMRC approved schemes include:

  • Company share option plans (CSOP);
  • Share incentive plans (SIP); and
  • Save as you earn (SAYE) schemes

Identifying the suitability of an employee share scheme will depend on your businesses’ own circumstances and the objectives you want the share scheme to achieve.

Furthermore, if an approved scheme is not suitable, for example, where the relevant conditions cannot be met by the company, or more flexibility is required, Magma can provide support in designing and implementing tax-efficient alternatives.

Get in touch

For more information and a summary of the key features of some of the most common employee share schemes, or to discuss a potential bespoke share scheme, get in touch on 01788 539000 or 0116 261 0061.

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