The number of employee share schemes hit a record high in the UK in 2016/17, as incentive becomes increasingly popular amongst tech start-ups, according to analysis by Moore Stephens
HMRC statistics show a 12% increase in the number of companies using employee share schemes, to 13,070 in 2016/17 from 11,680 in 2015/16.
Over the same period there has been an 75% annual increase in the amount of tax relief on the enterprise management incentive (EMI), which now totals £280m, up from £160m.
At the same time the number of companies using save as you earn (SAYE) and share incentive plans, aimed at more junior employees, fell from 1,430 in 2015/16 to 1,400 in 2016/17
Mark Perry, senior tax manager at Moore Stephens, said: ‘Employee share schemes have become a large part of UK start-up culture, particularly in tech and fintech businesses where take up has been high.
‘It was vital that the UK managed to resolve the EU state aid renewal issues for the EMI scheme, as it is by far the most popular scheme in the UK.
‘These schemes are a flexible, tax efficient tool which incentivise employees, can fuel business growth and offers management a flexible exit strategy from the business.
‘However, the SAYE is still open for improvements, with a 0% interest rate not offering more junior employees an attractive opportunity to become stakeholders in their place of work.’
Report by Pat Sweet
