Share schemes can be a tax efficient way to attract both employees and investors.

A business can offer employees shares through Share Incentive Plans, Save As You Earn, Company Share Option Plans and Enterprise Management Incentives (EMIs) which involves some tax advantages for you.

If you are looking to grow your business through external investment, you might want to consider this opportunity as not only will you raise your finance but also your investor will receive tax relief on their investment through an EIS/SEIS scheme.

Here are some of your options explained in a little more details.

Enterprise Investment Scheme (EIS): 

  • Useful way for growing companies to raise finance of up to £5m per year (up to £12m max in the companies lifetime), to grow their business
  • In addition, eligible investors can receive substantial tax relief of 30% on the value of their investment. 

 

Seed Enterprise Investment Scheme (SEIS):  

  • Useful way for new companies to attract investment up to £150k. 
  • In addition, eligible investors can receive substantial tax relief on the value of their investment – e.g. 50% income tax relief on the amount subscribed + capital gains tax relief. 

 

EMI Schemes : 

  • Valuable, tax efficient scheme aimed to attract, reward and retain employees. 
  • Ability to grant shares to employees, with no income tax or NIC implications. 
  • Mainly available to companies or groups with assets of no more than £30 million. The company’s activities must not be in an excluded sector including: banking, farming, property development, and legal services

 

Setting either of these share schemes and managing them takes a lot of care and attention especially as it can be extremely valuable to the growth of your business. Having us by your side to assist you will give you the confidence that your long terms are achievable.