Employee share schemes hit record levels in the UK

  • Tax relief on most popular scheme, EMI, increases by 75% in a year boosted by UK tech sector
The number of employee share schemes hit a record high in the UK in 2016/17, as incentive becomes increasingly popular amongst tech start-ups.

Statistics released by HMRC today revealed:
 
  • A 12% increase in the number of companies using employee share schemes, to 13,070 in 2016/17 from 11,680 in 2015/16.
  • A 75% annual increase in the amount of tax relief on the Enterprise Management Incentive (EMI) scheme to £280 million in 2016/17 from £160 million in 2015/16.
  • Companies using Save as You Earn and Share Incentive Plans, aimed at more junior employees, fell from 1,430 in 2015/16 to 1,400 in 2016/17.
Mark Perry, Senior Tax Manager, says: “The UK is the envy of Europe with employee share schemes that encourage entrepreneurship.

“Employee share schemes have become a large part of UK start-up culture, particularly in tech and fintech businesses where take up has been high.
 
“It was vital that the UK managed to resolve the EU State Aid renewal issues for the EMI scheme, as it is by far the most popular scheme in the UK.
 
“These schemes are a flexible, tax efficient tool which incentivise employees, can fuel business growth and offers management a flexible exit strategy from the business.
 
“However, the Save As you Earn Scheme is still open for improvements, with a 0% interest rate not offering more junior employees an attractive opportunity to become stakeholders in their place of work.”   
 
To discuss how your business could benefit from share option schemes, please contact Mark Perry.

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