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Employee share schemes

Employee share ownership can help increase levels of employee engagement and lead to better business performance. This eBook provides guidance on the various employee share schemes and looks at issues such as accounting treatment, tax relief and reporting obligations.

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Contents

1. HMRC discretionary approved schemes

Chapter 1 covers the two HMRC discretionary approved schemes that companies can offer to employees on a selective basis. These are the Enterprise Management Incentive Share Scheme and the Company Share Option Plan.

2.HMRC all-employee approved schemes

Chapter 2 covers the HMRC approved schemes which must be offered to all employees who satisfy the eligibility criteria. These are the Savings Related Share Option Scheme and the Share Incentive Plan.

3. Valuation

Chapter 3 looks at methods of determining the market value of shares for unquoted companies and those trading on an exchange.

4. Unapproved schemes

Chapter 4 covers unapproved schemes which are arrangements which do not qualify for relief from income tax and NICs. It looks at taxation, reasons to use an unapproved scheme and types of scheme.

5. Accounting for share schemes

Chapter 5 considers the accounting treatment of employee share schemes.

6. Other practical issues

Chapter 6 looks at internal approvals for the adoption of an employee share scheme or when making awards. It also covers dilution levels, grant policy, corporation tax relief, communication and exercising an option.

7. Reporting obligations

Chapter 7 focuses upon the annual reporting obligations to HMRC which all companies have in relation to employee share schemes, whether they are approved or non-HMRC approved.

8.Company law and employees' share schemes

Chapter 8 considers the company law requirements related to establishing and operating an incentive arrangement.

9. Employee trusts

Chapter 9 focuses on employee trusts which are commonly used to support employees' share schemes.

10. Buying or selling a company or business

Chapter 10 considers the issues where a target business or company operates an employee share scheme.

11. Governance

Chapter 11 looks at the additional requirements that quoted companies operating employee share schemes must adhere to such as the UK Corporate Governance Code and the Model Code.

Practical tools and other customisable content

This publication includes the following customisable content:

Terms of use

ICAEW members and ACA students can access the publication subject to the conditions set out in the terms of use, copyright statement and disclaimer below.

You are permitted to view, print and download this eBook for your personal use. Unless you have the permission of the copyright owner, you may not re-transmit the publication to anybody else.

Copyright

This publication is the copyright of ICSA Publishing Ltd.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission, in writing, from the publisher. This publication is a general guide and is correct at the time of writing.

Disclaimer

The publication does not necessarily deal with every important topic or cover every aspect of the topics with which it deals. It is not intended to provide legal advice and should not be treated as a substitute for legal advice. Legal advice should always be sought before taking action based on the information provided. The authors bear no responsibility for errors and omissions.

The Institute of Chartered Accountants in England and Wales (as distributor) disclaims all liability for any errors or omissions.

Employee share schemes

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Karen Cooper ICSA Publishing Ltd, 2013

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