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Recent HMRC announcements relating to EMI options HMRC recently made new announcements about tax-advantaged Enterprise Management Incentive (EMI) share options in its Employment Related Securities Bulletin 31 (21 March 2019) and in updated Share Valuations guidance (1 April 2019). Errors in notification of EMI options to HMRC When a company grants an EMI option, it…

April 18, 2019 Read more >

Don’t miss the deadline for online share plan returns The deadline for submitting annual online employee share plan returns to HMRC for the tax year ended 5 April 2019 is 6 July 2019.  This is also the deadline for registering new plans which were first operated during that tax year. We recommend that companies should…

April 16, 2019 Read more >

International Share Incentive Plan – a case study This case study explains how a FTSE 250 company, with MM&K’s help, adapted a UK Share Incentive Plan (SIP) for its employees in Germany and Luxembourg. The Company regards employee ownership as essential to aligning employees and shareholders by creating a common interest in the growth in…

March 20, 2019 Read more >

Enterprise Management Incentives and Brexit Like any EU member state, the UK is subject to the ‘state aid regime’ regarding competition law, governed by the Treaty on the Functioning of the European Union and associated European legislation. These rules are in place to ensure open and fair competition and to prevent subsidies causing unfair distortions…

February 27, 2019 Read more >

Might EVA be making a comeback? Economic Value Added (EVA) was a popular financial measure in the 1990s, used by many major companies as well as investment analysts.  Interest in EVA has recently re-emerged as a result of the acquisition of EVA Dimensions by Institutional Shareholder Services (ISS) last year. EVA is defined as: EVA…

February 25, 2019 Read more >

Update on the changes announced in the Budget to the rules for entrepreneurs’ relief and their impact on employee incentives Introduction In the Autumn Budget, the Chancellor had announced that the definition of ‘personal company’ for the purposes of ‘entrepreneurs’ relief’ for capital gains tax purposes would be tightened so that, with effect from 29…

January 30, 2019 Read more >

Executive Director Pensions and Post-Employment Shareholding Our December e-news described the new Investment Association (IA) Remuneration Principles published on 22 November 2018.  On 23 January 2019, the IA announced the specific approaches which IVIS will take at AGMs in 2019 on two of its new requirements: Executive Director Pensions and Post-Employment Shareholding Periods.  These apply…

January 24, 2019 Read more >

Valuation of share-based remuneration:  importance of underlying assumptions There are particular circumstances when a company needs to calculate a fair value of share options or performance share awards.  As the majority of performance shares in the UK are structured as nil-cost options this article refers throughout to options only. The most common circumstances are: 1.…

November 27, 2018 Read more >

Changes announced in the Budget to the rules for entrepreneurs’ relief Introduction While there had been concerns whether entrepreneurs’ relief (which reduces the rate of capital gains tax for higher and additional rate taxpayers from 20% to 10% on the first £10 million of an individual’s qualifying lifetime gains) would be significantly reduced, or even…

November 26, 2018 Read more >

Changes announced in the Budget to the rules for entrepreneurs’ relief and their impact on employee incentives Entrepreneurs’ relief reduces the rate of capital gains tax from 20% to 10% on the first £10 million of an individual’s qualifying lifetime gains. It is available on the disposal of shares in a trading company (or shares…

October 30, 2018 Read more >

In last month’s newsletter, we explained why the Inclusive Ownership Fund (IOF), proposed in the September 2018 Labour Party Conference, may not be the best method of enabling workers to share in the wealth they create.  We agree wholeheartedly that employee ownership can help increase a company’s productivity and encourage employees to identify more closely…

October 23, 2018 Read more >

Value Creation Plans – genuine attempts at designing executive LTIPs or too complex to explain? Some years ago, I attended the AGM of one of the UK’s biggest supermarkets. A shareholder asked a question about the proposed new executive LTIP. After a pause, one of the non-executives stood up and replied “it is too complex…

October 23, 2018 Read more >

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