Why use a share scheme?

Produced by Tolley in association with

Employment Tax

Guidance

If you talk to enough company directors, it becomes apparent that there are numerous reasons why they have decided to implement share schemes. For the most part, employee share incentive arrangements are only introduced after considerable thought and planning. As a result, there is every chance that they will fulfil an organisation’s expectations.

However, on occasion share schemes are implemented at the suggestion of professional advisers who have not fully explained the benefits. This is clearly not the best route to derive maximum benefit for the company or its employees.

The underlying factors that lead companies to introduce share schemes tend to be very different depending on their size. Ultimately though, the main goal is often to persuade employees to perform better and in doing so help the company to achieve their respective targets.

HMRC also produces a generic outline of share schemes, both of the tax advantaged and non-tax advantaged variety, for those considering introduction or implementation, see How employment related securities work if you’re an employer. Its Employee Tax Advantaged

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Stephen Diosi

Head of Employee Incentives, Mishcon de Reya LLP , Employment Tax

Stephen leads the Employee Incentives team at Mishcon de Reya. He has significant experience advising on the strategy, design, implementation and compliance of UK and global employee incentive arrangements, including long term incentive plans, all-employee share plans, HM Revenue and Customs tax-advantaged plans, management incentive plans and growth share and joint ownership plans. Stephen also advises on all related corporate, tax and trusts aspects, corporate governance issues, disclosure of directors' remuneration and share dealing regulations.In addition, Stephen works with companies on the impact that corporate actions have on their incentive arrangements and has acted on many public takeovers, mergers and acquisition, public to private transactions, initial public offerings, capital raising activities and private equity deals.Stephen also advises on contractual disputes and tax investigations relevant to incentives arrangements.Stephen works with a wide range of businesses across several industry sectors, including financial services, natural resources, entertainment, aerospace and transport and for companies that are listed on the London Stock Exchange, AIM and overseas exchanges, together with private equity houses, private companies and owner-managed businesses.

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