UK Employee Incentives Update | September 2026
Published on 18 September 2026
Removal of the unfair dismissal cap, EMI option notification changes, Dutch tax reforms and incentive planning, and more
Uncapped unfair dismissal | Increased significance of incentive awards
Employers are preparing for the significant reforms that are coming in as part of the implementation of the Employment Rights Act. The upcoming changes to unfair dismissal create the potential for much higher payouts (covering losses in respect of equity awards, bonuses and other benefits).
EMI options | Notification process set to change from next tax year
The process for notifying HMRC of the grant of enterprise management incentive (EMI) options is changing from the 2027/28 tax year onwards. For EMI options granted on or after 6 April 2027, notifications will be made to HMRC as part of the annual returns process.
Companies granting EMI options during the current 2026/27 tax year are reminded that they need to separately notify HMRC of the grant of EMI options by no later than 6 July 2027, in addition to filing end of year returns.
Employment-related securities returns | Accessibility improvements to HMRC templates
HMRC is making some accessibility improvements to its employment-related securities end of year templates and guidance notes from 6 April 2027.
New versions of the return templates are planned for publication this November. This is intended to give companies using any non-standard templates time to update them before the end of the tax year and the annual 6 July filing deadline.
New securities transfer tax | New regime from 2027
The UK government has been consulting on draft legislation proposing to replace Stamp Duty and Stamp Duty Reserve Tax on shares and securities with a mandatory, single new securities transfer tax (STT).
The consultation closed on 7 September, and the government aims to implement STT in 2027 (with an update on timing expected at or around the Budget on 28 October).
The £1,000 de minimis exemption is to be removed, which will bring many smaller transactions (including certain transfers of shares in the context of employee share plans and employee benefit trusts) within the scope of STT.
Mandatory payrolling of benefits in kind | Phased introduction
HMRC announced over the summer that mandatory reporting of income tax and National Insurance contributions for benefits in kind will now be introduced in phases from 6 April 2027 to 5 April 2028.
Phase 1, from 6 April 2027, will apply only to company cars, car fuel, vans, van fuel and medical benefits. Mandatory payrolling for most other benefits, phase 2, will be introduced from April 2028. Loans and accommodation will broadly remain outside the mandatory regime and will remain voluntary for payrolling.
HMRC has updated its interim guidance to reflect the revised implementation timetable. Final guidance for phase 1 is due to be published at or around the Budget on 28 October, to help employers prepare for this important change.
London Stock Exchange overhauls AIM Rules | Changes took effect from 5 August
The London Stock Exchange has announced the most significant overhaul of the AIM Rules in years, aiming to reposition AIM as a more attractive market for a broader range of companies. The revised rules include the removal of the comply or explain corporate governance code requirement and other changes relevant to executive remuneration.
The Netherlands | Box 3 and start-up to scale-up tax reforms put SARs in focus for Dutch employee incentives
The most extensive Dutch tax reforms in decades are prompting founders and chief executives to rethink how to reward and retain their people. Although the legislation remains in draft, companies may wish to review the structure of current incentive plans now in order to benefit from the new rules when they come into force.
Italy | Revenue Agency disapplies 10% surcharge on bonuses and stock options in the financial sector
The Italian Revenue Agency has issued operational rules implementing arrangements for the mechanism introduced by the 2026 Budget Law that allows for the disapplication of the 10% additional rate on variable remuneration paid to executives operating in the financial sector.
