Welcome to our Employee Incentives Update for summer 2019.
This edition covers:
- Updated guidance from HMRC on electronic signature of EMI agreements.
- The government response to BEIS's report on executive rewards.
- New Directors' Remuneration Regulations, which are now in force.
- The UK government's proposals for new IR35 legislation.
- Recent international developments.
We hope that you find this update interesting. If you would like to discuss any of the issues raised, please let us know. Our contact details are set out below.
EMI agreements | Electronic signature
As companies operating enterprise management incentive arrangements will be aware, the option must be in the form of a written agreement between the person granting the option (typically the company) and the employee.
HMRC updated its guidance on 13 June 2019 to confirm that electronic signature of EMI agreements is acceptable, provided that the company makes arrangements to provide option holders with copies of their electronic agreements and acceptance.
This confirmation from HMRC is to be welcomed, and many companies (in particular those in the US) are likely to take advantage of this additional flexibility for future grants. It is important to ensure that the documentation adequately provides for electronic signature - some changes to template agreements and processes may be required.
Executive rewards: paying for success | Government response to BEIS report
On 13 June 2019, the government published its response to the Business, Energy and Industrial Strategy Committee's report on "Executive rewards: paying for success". In many areas, the government is proposing to wait and monitor the impact of the recent strengthening of the UK Corporate Governance Code before making any further changes.
Directors' remuneration | New regulations in force
The Companies (Directors' Remuneration Policy and Directors' Remuneration Report) Regulations 2019 came into force on 10 June 2019, implementing articles of the Revised Shareholder Rights Directive.
BEIS has also published a Frequently Asked Questions, which will be helpful for quoted and traded companies covered by the new Regulations.
IR35 | UK government proposals for new legislation published
HMRC has published draft legislation on the IR35 reforms which are due to come into force on 6 April 2020. These reforms will affect users and suppliers of personal service company contractors in private and public sector situations.
France | The PACTE Act and employee incentives
In France, the "PACTE" Act was adopted on 11 April 2019. Its aim is to encourage and improve profit sharing, employee share ownership, employee participation and employee savings in companies.
International Tax Update | Summer 2019
Our International Tax Update was published on 19 July 2019. This covers the taxation of digital multinational enterprises, together with the recent global trend for clamping down on cross-border anti-avoidance and the increase in disclosure obligations to tackle perceived avoidance.