Guide

Set up employee share schemes

Introduction

An employee share scheme is one way to give employees a stake in your business and help improve its performance.

As employees normally have to remain with the business to get this benefit, share schemes encourage loyalty and can help you retain valued staff. They act as an incentive or reward and may also help recruitment.

This guide examines the various share-award and share-option schemes, including tax-advantaged and taxed (approved and unapproved) schemes. It also examines the benefits and potential pitfalls, and gives information on how to choose and manage a scheme that suits your business.

It's a good idea to talk to your legal or financial adviser about the tax and National Insurance implications of different employee share schemes before introducing one.