Business Tax: Employment matters and incentivisation

Richard Godmon - Menzies Accountant

Richard Godmon – Business Tax Partner

People are often a business’s greatest asset, so it is important to carefully consider how best to attract, retain and motivate your key employees.     

Empirical studies have shown that providing key employees with valuable shares or share option rights can be a very powerful incentive and motivator, because it aligns the interests of senior staff with those of the shareholders. 

The employing company invariably benefits from increased commitment and productivity, as well as the retention of those hard to replace senior staff.       

There are several approved share incentive arrangements in the UK, such as the Enterprise Management Incentives (EMI) share option scheme. What is a good fit for your business and at what point in your life cycle will depend on your specific facts and plans for the business. However, how you implement and communicate a share incentive plan to staff is important if you want to fully reap the benefit. 

Our team can assist with all aspects of the implementation, including agreeing any tax valuations with HMRC, or meetings with staff to explain the type of scheme chosen.  

Employing staff brings with it many legal obligations and tax considerations.  Including of course the structure of the employment package, benefits and pension considerations.  Our People Solutions team work across multiple disciplines to arrive at a bespoke solution that meets your needs, which includes how to reward and recognise your people. 

There may also be support available for your business, e.g. under the Apprenticeship Levy scheme, or grants.  

Contact Menzies Business Tax Team

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