Employee Share Schemes

Employee share schemes offer employees the opportunity to buy shares in the business they work for. Owning part of a business offers a great incentive for employees to contribute to the success of the business and remain loyal to the business. There are ‘approved’ employee share schemes and ‘unapproved’ employee share schemes, this references HRMC’s view of an employee share scheme and whether or not it comes with tax advantages as a result.

Employee shares schemes differ greatly between those suitable for small and large companies.  Small businesses looking to set up an employee share scheme are most likely considering an enterprise management incentive scheme because EMI schemes enjoy tax advantages and as a business owner you can choose who is eligible to join the scheme and when.

Larger businesses might chose a SAYE or SIP because these must be open to all employees, which type of employee share scheme is most advantageous for a business and its employees will depend on a number of variables.