In today's flexible labour market, key employees (particularly the highly skilled and those in growing high tech industries) have opportunities to change jobs as often as their personal circumstances and career goals demand. Many employers are therefore faced with the problem of keeping staff productive and motivated while providing them with incentives to stay loyal.
The Chancellor's November Pre-Budget statement announced two new employee share ownership arrangements which could make this less of a problem.
The All Employee Share Plan allows shares to be purchased by and distributed to employees with significant savings in Income Tax, National Insurance Contributions (NIC) and Capital Gains Tax. Employers benefit as the costs are tax-deductible.
The Enterprise Management Incentives Scheme is aimed at smaller trading companies who operate in a riskier entrepreneurial environment and who are looking to attract professionals from more established areas of commerce. It involves the granting of potentially valuable share options to a limited number of key employees who benefit, again, through Income Tax, NIC and Capital Gains Tax savings.
The plans give employers another option in remuneration planning and encourage employees by giving them a stake in the business.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
