HMRC Provides New Guidance on Corporation Tax Relief for Employee Share Awards

23 August 2023

• Tax

Employee share awards are a popular way for companies to attract and retain talent.  However, the tax treatment of these awards can be complex.

HMRC recently published new guidance on Corporation Tax relief for the cash cost of net-settling and cash cancelling employee share awards.  This is welcome news, as it confirms that businesses may be eligible for relief for these costs.  The guidance also sets out HMRC’s view on the quantum (amount) and timing of the relief.

What does this mean for businesses?

• Businesses may be able to claim Corporation Tax relief for the cash cost of net-settling or cash cancelling employee share awards.  This can be a significant saving, as the cash cost of these awards can be substantial.
• The guidance provides clarity on the quantum of Corporation Tax relief that is available.  This is important, as it will help businesses to accurately calculate their tax liability.
• The guidance clarifies the timing of Corporation Tax relief.  This will help businesses ensure that they claim the relief in the correct accounting period.

Overall, the new guidance from HMRC is a positive development for businesses that offer employee share awards.  It provides clarity on the tax treatment of these awards and makes it easier for businesses to claim Corporation Tax relief.

Contact us:

If you are considering offering employee share awards to your employees, it is important to understand the tax implications.  Our expert tax advisors can help you understand HMRC’s guidance and ensure that you are claiming the correct amount of relief for your business.