John Dormer Archive

Recruiting, retaining and motivating key staff in the gaming sector

Key to the success of any video games company is the recruitment, retention and motivation of employees who can help to make a success of the business they work for. 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.

The Autumn Statement – the impact on employment tax and employee share incentives

There were important announcements today in the employment tax and employee incentives arena. Specifically with regard to employee share ownership, the use of tax efficient employment structures, updates on Office of Tax Simplification (OTS) reviews and company cars. We’ll have to “wait and see” for the detail of these changes – more detail should follow in the draft Finance Bill 2014 clauses to be issued on 10 December. Read on for more detail of today’s announcements.

Employment tax governance – a new era?

Employer compliance has taken a back seat for HMRC to some extent in recent years, other than specific focused compliance activity in certain areas of risk. It now appears that HMRC recognises the limitations of its risk-based approach which has not been able to ’get under the skin’ of employer compliance issues.

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].

Employee shareholder status

In line with the government’s objective to encourage greater involvement by employees in the businesses they work for and to introduce more flexibility for employers, a new category of employee – the employee shareholder – was introduced on 1 September. Although there are potentially significant tax reliefs available for employee shareholders, there are associated conditions and income tax issues to consider which mean that employee shareholder status won’t be appropriate for everyone.

The deadline approaches for employee share reporting

Dont miss HMRC's deadline for share and incentive reporting... If you have awarded shares or share incentives to directors (including non-execs) and/or employees you must report relevant activity via the annual HMRC share reporting process. The deadline for making returns is usually 6 July following the end of the tax year (i.e. 6 July 2013 for activity in the tax year ending 5 April 2013).

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).
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