Which share plan is best for your company?

21 March 2019

Every business wants to retain and incentivise its best people and using the right share plan is an important tool for most companies in achieving this. But where do you start?

The best way to approach this challenge will vary depending on your business’s current stage of development and strategy for growth – but all starts with research. Once you have a good idea of who you want to incentivise, and for how long, the next step is to decide how much you want to spend on the incentive. Then the task is to compare the benefits of the different share plans available to you in the UK: for example, there are specific Incentive plans for unlisted companies but also schemes that will provide strong incentives for employees of listed companies.

Another key factor is the tax treatment of the scheme for both the employer and the employee. In the UK, the Government has created a range of ‘tax advantaged’ share plans to help companies – each with slightly different objectives and conditions:

However, going for tax breaks is not always the best way to meet your objectives. Non - tax advantaged share options can give employers considerably more flexibility and it is often sensible to mix and match a range of share plans to get the best outcome for all parties – this could include:

The paperwork

As you would expect, any share incentive does come with an administrative burden but BDO can help you keep it under control. The first step is to undertake a Share Plan Compliance review to ensure that all tax issues are identified; BDO can then help you with:

For help and advice on using share schemes to incentivise your employees, please contact Andy Goodman or Matthew Emms.

Employer Essentials index

Share plans and incentives