Share schemes & incentives

Hands-off management does not preclude an employment relationship

The degree of control exercised by an engager has been a long-standing factor in determining employment status. In the recent case of Troutbeck SA V White & Anor [2013] the Court of Appeal has ruled that the absence of actual day-to-day control does not preclude an employment relationship. Instead, a much broader review of any agreement between the parties and the circumstances is required. This emphasis on taking “a step back” echoes the ruling in Autoclenz Ltd v Belcher [2011].

New regulations on share buy backs aim to boost wider employee ownership

The government is committed to promoting wider employee ownership of businesses as part of a drive to encourage more diverse ways of running businesses. In 2012 the Nuttall Report on Employee Ownership gave Parliament the impetus to draft new regulations simplifying the process for private companies wanting to buy back shares from departing employees. These regulations have now been approved by Parliament and will be incorporated into the Companies Act 2006.

Draft Finance Bill legislation published today

Draft Finance Bill legislation published today looks set to provide a much needed boost to one of the government’s key tax efficient employee incentive plans. The tax efficient Enterprise Management Incentive (EMI) Plan has been used by many growth companies for a number of years now and allows companies to grant tax efficient options to acquire shares. Based on existing tax rules though, if the option is not exercised more than 12 months prior to the disposal of the resulting shares under option, those shares will not qualify for the 10% lowest rate offered by Capital Gains Tax Entrepreneurs Relief (ER).

Autumn Statement 2012 - employee benefits review

Wright Hassall's employee benefits and tax team provide a brief summary of the changes announced today in the 2012 Autumn Statement. The government has confirmed (following its initial announcement on 8 October 2012) that it will introduce legislation from April 2013 introducing a new category of 'employee shareholders' who can be given shares worth up to £50,000 that will be exempt from capital gains tax on their sale in exchange for forfeiting certain employment rights.

Car cash allowances might be an opportunity to claim an NIC refund

The Court of Appeal (“CoA”) has decided in favour of the taxpayer in Cheshire Employer and Skills Development Ltd (“CESDL”) (formerly Total People Ltd) v HMRC. CESDL paid motoring expenses to its employees for the business use of their own cars. Employees were paid either (i) 40 pence per business mile or (ii) 12 pence per business mile for fuel plus a monthly cash allowance. CESDL argued that the monthly cash allowance, in so far as it did not exceed an amount equivalent to the number of business miles multiplied by 28p (40p-12p), should not be regarded as earnings subject to NIC.
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