Several schemes are available to employees that allow them to purchase shares in the company they work for if this option becomes available to them.

However, if the employee wants to take advantage of any tax savings, then it's essential to use one of these routes:

• Share Incentive Plans
• Save As You Earn (SAYE)
• Company Share Option Plans (CSOP)
• Enterprise Management Incentives (EMIs)

In the Spring Budget (March 20223), some changes were announced concerning the two options, Company Share Option Plans and Enterprise Management Incentives. Below we are sharing a summary of changes you need to know about if you are considering these employee share schemes.

Reform of the Company Share Option Plan (CSOP)

This reform makes changes to the CSOP, a tax-advantaged employee share scheme available to all UK companies and their employees as follows:

• The employee share options limit will be doubled from £30,000 to £60,000.
• The ‘worth having’ condition, which limits which types of shares are eligible for inclusion within a CSOP scheme, will be removed.

These changes will affect share options granted under CSOP schemes on or after 6 April 2023. Existing options granted before 6 April 2023 will also benefit from these changes.

Enterprise Management Incentives (EMI)

The measure makes changes to simplify EMI by removing two administrative requirements when companies grant EMI options on or after 6 April 2023. Existing EMI share options granted before 6 April 2023 that have not been exercised will also benefit from the changes.

• It removes the requirement for the company to set out within the option agreement the details of any restrictions on the shares to be acquired under the option.

• It removes the requirement for the company to declare that an employee has signed a working time declaration when they issued an EMI option. It does not remove the working time requirement itself.

From 6 April 2024, the government will also extend the deadline for notifying an EMI option from 92 days following the grant to 6 July following the end of the tax year. This will be legislated separately, and the impacts will be set out at that point.

For full details on all these schemes, look at this link on the Gov.UK website  - Tax and Employee Share Schemes.