Employee Incentives Update | May 2023
Published on 10th May 2023
In this edition, we cover annual reporting for employment-related securities arrangements (including changes to HMRC's templates), recent improvements to tax-advantaged plans and some upcoming consultations
We also report on developments across Europe, including recent changes to the Dutch share option regime and a further update on wage tax deferral for German start-ups in an international setting.
Employment-related securities | Updated HMRC templates and 6 July 2023 deadline
Companies operating employment-related securities arrangements are reminded that the deadline to file their annual returns for the tax year ending 5 April 2023 is 6 July 2023.
HMRC has made changes to the templates and additional mandatory information is now required, so companies should allow extra time to complete their returns this year.
Enterprise management incentive options | Simplification of the grant process
At the Spring Budget 2023, the government announced a number of changes to simplify the process for granting enterprise management incentive (EMI) options. Two of the changes have already been introduced, with a third change to take effect from 6 April 2024.
Company share option plans | Limit now £60,000
Companies considering tax-advantaged arrangements are reminded that improvements to the company share option plan (CSOP) took effect from 6 April 2023.
The individual limit on the market value of shares which may be placed under CSOP option has been increased to £60,000. In addition, the share class restrictions (which previously prevented some companies with more than one share class from qualifying) have been removed.
CSOPs are likely to increase in popularity, particularly for companies which do not (or no longer) qualify for EMI.
Employee ownership trusts | Consultation announced
The government announced on 27 April 2023 that it will publish a consultation later this year on the use and effectiveness of the employee ownership trust (EOT) tax regime. This is to ensure that the reliefs are targeted closely at incentivising EOTs as an employee ownership business model while preventing the reliefs from being used for unintended tax planning.
Given the widespread use of EOTs in the last few years this is not a surprise; it will be interesting to see what the proposed changes will be and that they do not stimy the increasing numbers of genuine employee-controlled companies.
Remuneration | Is there a role for cryptoassets in the future of employee remuneration in the UK?
As regulators contend with cryptoassets, their role as a form of remuneration may develop – though there are considerable legal, tax and practical issues for employers to overcome.
Update: Germany | Wage tax deferral for German start-ups in an international setting
Our German team provide a further update on the challenges of the wage tax deferral for German start-ups in an international setting.
Netherlands | Changes to the Dutch share option regime
The Dutch share option regime changed on 1 January 2023 in order to enable companies (in particular start-ups) to attract more talent.
Netherlands | Changes to the Dutch Financial Supervision Act
Our Dutch team also report on recent changes to the Dutch Financial Supervision Act (which regulates supervision of much of the financial sector in the Netherlands).
On the the horizon | Call for evidence on UK all-employee plans
At Spring Budget 2023, the government announced that it will be launching a call for evidence on the tax-advantaged all-employee plans in the UK. The consultation will consider opportunities to improve and simplify the Save as You Earn (SAYE) Plan and the Share Incentive Plan.
