- In 2016/17, 11,850 companies operated employee share schemes
- Around half a million employees were granted options with a further 8 million awards/purchases of shares
- Overall there was a benefit of £1bn of Income Tax and NIC relief to employees and companies
- Save-as-you-Earn (SAYE/Sharesave) remains the most popular option scheme with 400,000 employees granted options with Enterprise Management Incentive schemes (EMIs) seeing strong growth with 17% more employees granted options
Following the release of annual HMRC statistics1, Equiniti – the number one provider in the UK employee share plans industry – finds that a record number of companies are now operating tax-advantaged share schemes for their employees.
In 2016/17, with 11,850 companies operating employee share schemes granting options to nearly half a million employees (c.467,000) and with over 8 million awards and purchases of Share Incentive Plan (SIP) shares, the initial value of shares and options granted totalled £3.68 billion.
SIPs provided valuable income tax and NIC relief with an estimated £410 million of savings to companies and their employees.
SAYE schemes provided the greatest option benefit to employees with 400,000 granted share options by the 510 companies that operate this sort of scheme. The initial value of shares granted through 2016/17 totalled £1.99 billion with each participating employee holding shares initially worth £5,010.
EMI plans, which allow companies to reward selected employees, saw strong growth through the 2016/17 tax year. The number of companies operating these schemes rose from 8,610 to 9,890 with the initial value of shares reaching £500 million, up from £380 million the previous tax year, granting options to 27,000 employees.
Phil Ainsley, Director of Employee Services at Equiniti, commented:
“Employee share schemes are a fantastic way for companies to reward and motivate their employees – a core element of the UK labour market DNA. Not only do employees benefit from tax efficiencies but they boost engagement within the workforce and encourage both better understanding and proactive decisions in financial planning. At a time when there is a squeeze on disposable income, these schemes continue to attract participants who value the financial benefits and flexibility on offer.
“The figures demonstrate the continued popularity and value of share schemes. This year the trends remain strong despite a slight decline in the number of employees receiving shares or granted options, indicating the sensitivity of the figures which can be heavily impacted by scheme changes made by a few big employers.
“The stock market growth over the past year means it is likely many employees will have benefitted financially from their holdings, especially pleasing in the low interest-rate environment. We are hopeful that employers not operating these schemes will see their worth, so that more employees are given the chance to gain a stake in their Company and share in the wealth they help to create.”
For more information:
Temple Bar Advisory
Notes to Editor:
- Employee Share Schemes Statistics for 2016-2017: https://www.gov.uk/government/statistics/employee-share-schemes-statistics-2013-to-2014-commentary
Equiniti is a specialist outsourcer delivering technology-enabled solutions to some of the best-known brands and public-sector organisations in the UK, including c.70 of the companies in the FTSE 100. It is the UK’s leading provider of share registration and associated investor services, and also has market leading positions in administration of employee share plans, pension administration and software, and employee benefit schemes. Equiniti’s services, which are delivered by over 4,578 employees, benefit 28 million people in the UK and 120 countries around the world.
Equiniti is the number one provider in the UK employee share plans industry receiving employee contributions of over £700 million each year, operating plans in 120 countries worldwide and handling 1.2 million employee accounts. This includes providing share plans for 40% of FTSE 350 companies with clients ranging those with the number of clients eligible employees ranging from 30 to 300,000 employees.