Are share schemes only for large companies?

No, share schemes can be tailored to suit businesses of all sizes, from startups to multinational corporations.

How do share schemes affect company control?

While employees gain ownership, the impact on company control can be managed through careful scheme design and implementation.

What are the tax benefits of share schemes?

Many share schemes offer tax advantages, such as reduced income tax or capital gains tax for employees and potential corporation tax relief for employers.

What is employee share scheme advice and why is it important?

Employee share scheme advice provides tailored guidance on the design, implementation, and management of share schemes to ensure they are compliant, tax-efficient, and aligned with both company and employee goals. At David Craddock Consultancy Services, we help businesses navigate this complex area with confidence.

Which types of employee share schemes do you advise on?

We advise on all HMRC-approved and unapproved share schemes, including EMI, CSOP, SIP, and growth shares, as well as bespoke arrangements for private and listed companies.

Why is Employee Share Scheme Advice important for SMEs?

Employee Share Scheme Advice is crucial for SMEs because smaller businesses often have limited resources and need to balance rewarding staff with maintaining cash flow. With expert advice, SMEs can implement tax-efficient schemes such as EMI (Enterprise Management Incentives), which help attract and retain talent without placing unnecessary strain on the business. Proper advice ensures the scheme is structured to meet both HMRC requirements and the company’s long-term growth strategy.

What type of Employee Share Scheme Advice does HMRC recommend?

HMRC does not provide direct business consultancy, but it sets out strict rules for approved share schemes such as EMI, CSOP, SIP, and SAYE. The right Employee Share Scheme Advice helps businesses interpret HMRC guidance, ensuring their chosen scheme qualifies for the available tax reliefs. Professional advice is essential to design and implement a compliant plan that takes full advantage of HMRC-approved benefits while avoiding pitfalls that could lead to unexpected tax liabilities.

Can Employee Share Scheme Advice reduce tax liabilities?

Yes. Tailored Employee Share Scheme Advice can significantly reduce tax liabilities for both employers and employees. For example, EMI schemes allow gains to be taxed under Capital Gains Tax rather than Income Tax, often at a much lower rate. Employers may also benefit from corporation tax relief on the costs of providing the scheme. Without proper advice, businesses risk missing out on these reliefs or inadvertently triggering higher tax charges.

Expert Share Scheme Tax Advice | Employee Share Plans UK

Share Scheme Tax Advice: Employee Share Schemes Explained

Looking to reward staff and retain top talent? Employee share schemes offer UK businesses a tax-efficient way to align employees with company growth, improve retention, and increase engagement. Whether you’re a start-up, SME, or established company, we help design compliant and effective share plans tailored to your business goals. Understanding the tax treatment of employee share schemes is vital. With expert Share Scheme Tax Advice, businesses can unlock tax efficiencies while rewarding employees.

Employee ownership allows employees to have a stake in the company, fostering a sense of ownership, increasing motivation, and aligning their interests with the long-term success of the business.

We offer expert Employee Share Scheme Advice tailored to your business objectives, ensuring your scheme is both tax-efficient and strategically aligned with long-term growth.

With a proven track record of delivering innovative solutions for both quoted and unquoted companies, David Craddock helps businesses:

✔️ Maximise employee engagement through bespoke share incentive plans.

✔️ Optimise tax efficiency while ensuring legal compliance.

✔️ Restructure share capital for business growth and succession planning.

✔️ Implement and manage schemes effectively for long-term success.

Our strategic approach ensures that your employee share schemes not only comply with regulations but also deliver tangible results, fostering a culture of ownership and commitment.

Considering a succession plan or management buyout? We can help structure your scheme, which is linked to an employee share trust, to facilitate tax-efficient share sales under the capital gains tax regime.

📞 Get in touch today to explore how we can transform your business through the proper tax-efficient share schemes!

What Are Employee Share Schemes?

Want to inspire loyalty, motivation, and long-term success in your workforce? Employee share plans give employees the chance to own a piece of the business they help grow, creating a stronger sense of commitment and shared success.

But with so many options, how do you choose the proper tax-efficient share schemes?

Approved vs. Unapproved Share Schemes: What’s the Difference?

Some share schemes come with tax advantages under HMRC rules, while others offer more flexibility.

Approved Share Schemes are those that meet the conditions set out by HMRC, offering tax advantages to both employees and employers. These schemes are typically more structured and involve regulatory compliance to ensure the tax benefits are granted. Examples include the Enterprise Management Incentive (EMI) and Save As You Earn (SAYE) schemes.

Unapproved Schemes, on the other hand, are more flexible and do not qualify for the tax reliefs available to approved schemes. However, they allow businesses to design share schemes tailored to their specific needs without the strict requirements set by HMRC. While employees may face higher tax liabilities on shares awarded through unapproved schemes, they can be an excellent option when flexibility is paramount.

Tax Benefits Explained with Employee Share Scheme Advice:

Choosing and implementing the right scheme is complex. That’s why tailored Employee Share Scheme Advice is essential — ensuring compliance, maximising tax efficiency, and aligning with your long-term goals.

Here are some extra benefits:

✔️ Tax Advantages: Employees often benefit from tax-free gains or capital gains tax (CGT) relief. For example, EMI allows the employee to pay tax on shares at a lower rate and potentially avoid Income Tax at the time of grant.

✔️ Attracting & Retaining Talent: Approved schemes, such as SIP, create strong incentives for employees to stay long-term as they benefit from the growth of the business.

✔️ Boosting Employee Engagement: Employees with ownership stakes are more motivated, aligned with the company’s goals, and invested in its success.

Eligibility Criteria for Approved Schemes:

✔️ Companies must meet certain size and structure conditions, with restrictions on the value of shares that can be offered under EMI, for example.

✔️ Employees must be working for the company at least 25 hours per week and have a qualifying role.

✔️ Company restrictions may limit shareholding percentages for certain schemes (e.g., SIP, SAYE).

Tax Benefits of Employee Share Schemes (For Employers & Employees):

✔️ Capital Gains Tax Relief: Under EMI, shares can qualify for CGT relief, allowing employees to sell shares and pay less tax.

✔️ Income Tax & NICs: Employees in schemes like SAYE may not face Income Tax or NICs if the options are exercised after a specific holding period.

Best Share Schemes for Small Businesses

The Enterprise Management Incentive (EMI) scheme is a top choice, offering tax benefits while allowing business owners to decide who participates and when.

Share Schemes for Large Companies

A SAYE (Save As You Earn) or SIP (Share Incentive Plan) ensures all employees have access to ownership opportunities, fostering a culture of collaboration and reward.

📞 Contact Us for Personalised Share Scheme Tax Advice.

Employee Share Option Schemes

An Employee Share Option Scheme is a popular way for businesses to reward and retain staff by giving them the right to buy company shares at a fixed price in the future. Unlike receiving shares outright, options allow employees to benefit if the company’s value increases, creating a powerful incentive to help drive growth and long-term success.

In the UK, schemes such as Enterprise Management Incentives (EMIs) and Company Share Option Plans (CSOPs) are widely used, offering significant tax advantages for both employers and employees. With flexible structures and the potential for real financial reward, share option schemes are an effective way to align employees’ interests with the success of the business.

Having The Correct Share Incentive Plans Can Help:

✔️ Improve employee retention & productivity
✔️ Provide valuable tax benefits
✔️ Align employees with business growth

Get Expert Share Scheme Tax Advice from David Craddock

📞 Let’s find the perfect fit for you. Get in touch today to explore the best employee share plan for your business!

Why Introduce a Share Scheme? Key Benefits for Employers
Why introduce an Employee Share Trust?

Below is a list of reasons why companies and their advisers should consider introducing an employee ownership arrangement.

Please note that none of these reasons are mutually exclusive. The company can choose to operate an employee share plan for all, or any combination, of these reasons

To provide a basis for employee motivation and incentive.

To enable the company to meet its recruitment requirements.

To act as a retention tool for quality employees.

To expand the basis on which employees are rewarded for their work.

To encourage consensus between shareholders, management and employees.

To enable employees to think like shareholders.

To encourage interest in the business from within the workforce.

To assist in succession planning where a proprietor is planning to retire.

To facilitate a management buy-out.

To secure tax efficiencies for the purchase or sale of shares.

Below is a list of reasons why companies and their advisers should consider the introduction of an employee share trust arrangement.

Please note that none of these reasons are mutually exclusive of each other. The company can choose to operate an employee share trust for all, or any combination of these reasons.

To create a market for the shares in the absence of a recognised stock exchange.

To support the operation of employee share scheme arrangements.

To avoid dilution by recycling existing shares for employee share schemes.

To secure the capital gains tax treatment on the sale of the shares.

To enable shareholders to diversify their investment portfolio.

To hedge on the purchase of shares when share prices are low.

To warehouse shares in a secure and safe environment.

To budget for the cost of share purchases for employee share schemes.

To cap the initial outlay required to fund phantom liabilities.

To support long-term incentive arrangements.

To create a market for subsidiary company shares.

To facilitate a management buy-out.

To assist in succession planning where a proprietor is planning to retire.

To buy-out dissident shareholders.

To enable outside investors to withdraw their investment.

To enable the personal representative of an estate to dispose of shares.

To allow flexibility in share pricing for sales.

To operate a share market offshore with a view to achieving tax efficiencies.

To operate a share scheme as part of a pension arrangement.

To give employees security that their scheme shares are ring-fenced for employees

Employee Share Scheme FAQs

Q: Are share schemes only for large companies?
A: No, share schemes can be tailored to suit businesses of all sizes, from startups to multinational corporations.
Q: How do share schemes affect company control?
A: While employees gain ownership, the impact on company control can be managed through careful scheme design and implementation.
Q: What are the tax benefits of share schemes?
A: Many share schemes offer tax advantages, such as reduced income tax or capital gains tax for employees and potential corporation tax relief for employers.
Q: What is employee share scheme advice and why is it important?
A: Employee share scheme advice provides tailored guidance on the design, implementation, and management of share schemes to ensure they are compliant, tax-efficient, and aligned with both company and employee goals. At David Craddock Consultancy Services, we help businesses navigate this complex area with confidence.
Q: Which types of employee share schemes do you advise on?
A: We advise on all HMRC-approved and unapproved share schemes, including EMI, CSOP, SIP, and growth shares, as well as bespoke arrangements for private and listed companies.
Q: Why is Employee Share Scheme Advice important for SMEs?
A: Employee Share Scheme Advice is crucial for SMEs because smaller businesses often have limited resources and need to balance rewarding staff with maintaining cash flow. With expert advice, SMEs can implement tax-efficient schemes such as EMI (Enterprise Management Incentives), which help attract and retain talent without placing unnecessary strain on the business.Proper advice ensures the scheme is structured to meet both HMRC requirements and the company’s long-term growth strategy.
Q: What type of Employee Share Scheme Advice does HMRC recommend?
A: HMRC does not provide direct business consultancy, but it sets out strict rules for approved share schemes such as EMI, CSOP, SIP, and SAYE. The right Employee Share Scheme Advice helps businesses interpret HMRC guidance, ensuring their chosen scheme qualifies for the available tax reliefs.Professional advice is essential to design and implement a compliant plan that takes full advantage of HMRC-approved benefits while avoiding pitfalls that could lead to unexpected tax liabilities.
Q: Can Employee Share Scheme Advice reduce tax liabilities?
A: Yes. Tailored Employee Share Scheme Advice can significantly reduce tax liabilities for both employers and employees. For example, EMI schemes allow gains to be taxed under Capital Gains Tax rather than Income Tax, often at a much lower rate.Employers may also benefit from corporation tax relief on the costs of providing the scheme. Without proper advice, businesses risk missing out on these reliefs or inadvertently triggering higher tax charges.

📞 Contact Us for Personalised Share Scheme Advice.

Employee Share Schemes