HR & Employment Law Insights

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George Osborne announced in  today's budget an important development with regard to  employee shareholders.  Under the scheme, which was thought to come into effect from 6 April 2013 but is now confirmed as 1 September 2013, employers can give staff between £2000 and £50,000 of shares in exchange for the employee sacrificing some employment rights, such as unfair dismissal and the right to request flexible working.

It was thought that the award of those shares was to be subject to income tax (so  a 20% taxpayer would have paid £400 income tax on their award of £2,000 shares).  However, today's announcement means the first £2,000 of shares will be exempt from income tax and NICs, which means they are effectively free of  tax for anybody receiving the minimum amount.

For more information on this announcement, and other areas affecting employers, you can visit Budget.