In this edition, we look at the government's consultation on whether the enterprise management incentive (EMI) scheme should be extended to include more companies. More widely, the case for expansion of employee share ownership in the UK is set out in a recent report that highlights the role employee share plans can play in the recovery from the coronavirus pandemic.
We also include a reminder about the employment-related securities HMRC annual returns deadline of 6 July 2021.
We hope that you find this update helpful. If you would like to discuss any of the issues raised, please let us know. Our contact details are set out below.
Annual returns for employment-related securities | deadline 6 July 2021
The deadline for submitting annual returns to HMRC in respect of employment-related security arrangements for the tax year ending 5 April 2021 is 6 July 2021. Action should be taken soon if you have not started to gather together the necessary information.
EMI options | call for evidence
As announced by the chancellor in the Spring Budget 2021, the government is seeking views on how the EMI scheme is operating and whether it should be extended to include more companies.
We are responding to the consultation, to express our support for the expansion of the EMI regime to ensure that all small and medium-sized enterprises (SMEs) and high-growth companies qualify to grant EMI options. The legislation currently contains some anomalies which mean that some companies that would ordinarily be viewed as SMEs do not qualify. It would be helpful for changes to be made to ensure that the scheme extends to all such companies and operates efficiently. .
A stake in success | new report highlights the benefits of employee share ownership
On 4 May 2021, the Social Market Foundation published "A stake in success: Employee share ownership and the post-Covid economy".
The report sets out the case for an expansion of employee share ownership in the UK, and for the share ownership agenda to form a key part of a “fair and strong economic recovery” narrative as we emerge from the coronavirus crisis.
Corporate governance | proposed executive remuneration reforms
On 18 March 2021, the Department for Business, Energy and Industrial Strategy (BEIS) released a consultation on the government’s proposals for restoring trust in audit and corporate governance.
In relation to executive remuneration, one of the most significant proposals is to strengthen the ability of companies to recover remuneration already paid to directors or to withhold pending awards where there has been failure. It will do this by initially asking the regulator to consult on changes to the UK Corporate Governance Code to include provisions which recommend that certain minimum clawback conditions or "trigger points" are included in directors’ remuneration arrangements and that these have a minimum period of application of at least two years after an award is made.