Share Guide: Schemes for all employees

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We set out below an at-a-glance comparison of some key ways in which all your company’s employees could become shareholders or have an ownership interest in your company

Share Incentive Plan (SIP)
How it works

Employees can purchase shares with full tax relief and/or be given shares free of tax.

TAX EFFICIENCY (INDIVIDUAL)
TAX EFFICIENCY (COMPANY)
EASE OF SETTING UP
OVERALL INCENTIVE AND REWARD VALUE
5 Stars
Shares may be purchased out of gross pay. Free shares may be given to participants without IT or NICs. No CGT on sales of shares.
5 Stars
Corporation tax (CT) deduction on value of free shares. No NICs on value of free shares or on value of shares purchased by participants.
3 Stars
Must be registered with HMRC and self-certified.
5 Stars
Straightforward to explain, carries risk in relation to shares bought by participants, tax efficient.

 

Save As You Earn (SAYE) options
How it works

Employees are granted options over shares and agree to save a monthly amount from their salary over three or more years. At the end of the savings period, they can either keep the money or use it to exercise their options.

TAX EFFICIENCY (INDIVIDUAL)
TAX EFFICIENCY (COMPANY)
EASE OF SETTING UP
OVERALL INCENTIVE AND REWARD VALUE
4 stars
No IT or NICs for certain “good leavers” if options held for at least three years. CGT on sale of shares.
3 Stars


CT deduction on option gains.

3 Stars
As above.
4 stars
Straightforward to explain, no risk, tax efficient

If you would like to explore how an employee share scheme might be introduced in your company, please contact us for an initial discussion.

We are happy to meet at our offices without charge or commitment and will be very pleased to hear from you.

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