Share Incentive Schemes & Share Options
Share incentive schemes and share options are popular methods used by companies to incentivise their employees and retain talent. At SMH Chartered Accountants, we provide expert taxation advice to both employers and employees on share incentive schemes and share options.
What are Share Incentive Schemes?
Share incentive schemes are a type of employee share ownership plan that allows employees to purchase shares in their company, usually at a discounted price. There are different types of share incentive schemes, including:
- Company Share Option Plans (CSOPs)
- Employee Shareholder Shares (ESS)
- Enterprise Management Incentives (EMI)
- Savings Related Share Option Plans (SRSOP)
- Share Incentive Plans (SIPs)
Each scheme has its own rules and tax implications, and it’s essential to get professional advice on which scheme is best suited to your business and employees.
What are Share Options?
Share options are contracts that give employees the right to buy or sell shares at a specific price at a particular time. They are often used as a long-term incentive for employees to encourage them to work towards the company’s success. The tax treatment of share options can be complex, and it’s crucial to seek professional advice to understand the implications of these schemes.
How Can SMH Group Help?
Our team of taxation experts can provide comprehensive advice on share incentive schemes and share options, including:
- Structuring and designing share incentive schemes
- Advising on tax-efficient employee share ownership plans
- Providing guidance on the tax implications of share options and share awards
- Assisting with the implementation and administration of share schemes
- Advising on the accounting and disclosure requirements of share incentive schemes
We work with both employers and employees to provide tailored advice that meets their specific needs and objectives. Our goal is to help businesses and individuals navigate the complexities of share incentive schemes and share options, ensuring they maximise the benefits and minimise the tax implications.
If you’re considering implementing a share incentive scheme or have questions about share options, contact the SMH Chartered Accountants team on info@smh.group or 0114 266 4432.
Company Share Option Plans (CSOPs)
A CSOP is a type of share option plan that allows employees to purchase shares in the company at a future date, typically at a discounted price. The shares are usually subject to a vesting period, meaning that employees must remain with the company for a certain length of time before they are able to exercise their options and purchase the shares.
Employee Shareholder Shares (ESS)
Employee Shareholder Shares (ESS) is a type of share incentive scheme in which an employee receives shares in their employer's company in exchange for giving up some of their employment rights. Introduced by the UK Government in 2013, ESS provides employees with a financial stake in the company they work for.
Enterprise Management Incentives (EMI)
EMI is a UK government-approved share option scheme designed to help small and medium-sized enterprises (SMEs) recruit and retain high-quality employees. The scheme enables eligible employees to acquire shares in the company they work for, providing them with a sense of ownership and a financial stake in the company's success.
Savings Related Share Option Plans (SRSOP)
A Savings Related Share Option Plan (SRSOP) is a type of share option plan that offers employees the opportunity to purchase shares in their employer's company. It is a tax-advantaged scheme, which means that employees can benefit from certain tax breaks when they participate.
Share Incentive Plans (SIPs)
Share Incentive Plans (SIPs) are a tax-efficient way for employers to award shares to employees as a form of remuneration. The plan must be open to all employees, although there may be some eligibility criteria such as length of service or minimum hours worked. SIPs can include a variety of share types, such as company shares, free shares, partnership shares, and dividend shares.
