We advise public and private companies on how they can pay and incentivise their employees, management and senior team in tax efficient ways. With a combination of tax and legal knowledge, supported by industry experience gained across a range of sectors, we provide cost-effective solutions that help businesses to recruit, retain and motivate talent.
Our employee benefits solicitors and tax experts advise on:
- EMI options
- Employee Shareholder Schemes
- Growth shares
- SUBCO growth share plans
- Tax efficient benefits and incentives
- Scheme documentation
- Employee incentivisation issues in corporate transactions (including M&A, JVs, TUPE transfers, MBOs, re-organisations and IPOs)
- Appropriate share incentives for management in private equity and venture capital backed companies
- Alignment of incentives with remuneration strategies
- Dilution modelling and setting appropriate pay out levels
- HM Revenue & Customs (HMRC) approved salary sacrifice schemes
- HMRC investigations, including crisis management
- Legal, regulatory and employment tax compliance
Employee Share Schemes
The success of any business is dependent upon the ability to recruit, retain and motivate its key employees. Organisations are, however, under pressure to control the cost that this involves.
Clients frequently ask us how they can balance the competing demands of motivating employees whilst still being able to control their overheads?
We advise businesses on designing their employee incentive strategy to minimise cost whilst maximising employee engagement and tax efficiency.
We are able to help with all aspects of employee incentives and employee share schemes; from selecting the right employee incentive scheme, drafting all related paperwork, communicating the arrangements to employees and dealing with the ultimate vesting/pay outs under the scheme.
We have expertise covering a wide range of employee share and incentive schemes, including:
- Enterprise Management Incentive (EMI) options;
- Growth shares;
- SUBCO growth share plans;
- Employee Shareholder shares (ESS);
- Share acquisition plans;
- Deferred share plans;
- Nil/partly paid plans;
- Joint share ownership plans;
- HMRC Company Share Option Plans;
- Unapproved share options;
- Phantom share options/ phantom shares;
- HMRC Save As You Earn (SAYE)/ Sharesave schemes;
- HMRC Share Incentive Plans; and
- Cash based bonus plans and bonus deferral arrangements.
Recruit, retain and motivate
Well-designed employee incentive plans can help deliver significant benefits to a business through:
- Helping to recruit new staff;
- Aiding with the retention of key employees;
- Aligning the interests of shareholders and employees through motivating employees to work towards desired business goals;
- Articulating how value is created for a business and rewarding employees for that value creation; and
- Providing rewards to employees in a tax and cost efficient manner for the employees themselves and also business owners and the company itself.
Using a tax efficient employee share scheme could deliver up to £1.27 of reward to an employee for every £1 of cost/dilution to the business/shareholders. This compares very favourably with a cash bonus arrangement which could produce as little as 47 pence of reward for every £1 of cost to the business/shareholders.
How can we help?
We can assist with all aspects of employee incentive design and implementation, including:
- Advising on and helping to determine the correct form of incentive for a business, taking account of relevant legal, employee relations and taxation considerations;
- Helping the businesses to identify key performance drivers and linking reward to performance to those KPIs;
- Ensuring legal and regulatory compliance;
- Advising on the tax treatment for the business and employees;
- Working with share valuers to prepare relevant share valuations and agree the same with HMRC;
- Drafting all relevant employee incentive and company law paperwork;
- Communicating the incentives to employees so that their motivational impact is maximised; and
- Providing ongoing support to the business right through to the maturity of the incentives and the vesting/payouts under them.
How much does this cost?
We can provide all the advice that you need in one place, saving you the cost of dealing separately with tax advisers and solicitors.
We offer a wide range of incentive solutions typically only matched by the ‘Big Four’ accountants coupled with a competitive and clear pricing structure so that you know up-front what our fees will be.
If you operate any share incentive arrangement you must report such activity to HM Revenue & Customs by 6 July 2017.Read more
Small and medium sized manufacturing businesses may sometimes find themselves at risk of losing key employees to larger companies offering bigger pay packets. However, there are certain share based incentive schemes which may help solve this problem.Read more
In a sector where the battle for talent is fierce and where, particularly for early stage companies, paying competitive salaries is a challenge, employers need to identify low cost ways of attracting and incentivising key people.Read more