Employee Share Scheme
Reward your staff and make your business more productive

If you have a valued and trusted workforce, why not reward them and improve your business performance at the same time? Employee Share Schemes are a powerful way of encouraging your employees to think like owners, helping to boost productivity and growth.

Whether you’re a start-up or an established company, we can provide fully-funded support to help you choose a scheme that’s right for your business.

What is an Employee Share Scheme?

An Employee Share Scheme (sometimes referred to as an Employee Share Ownership Plan, or ESOP) is a way of sharing company ownership with your team. You can reward one or more key people with equity, or all of your employees. That’s entirely up to you.

In an Employee Share Scheme employees hold, or have the opportunity to hold, shares personally, normally alongside other shareholders. Employees can be offered shares or they can be granted options which can be exercised at a time to suit the employee.Stock options Plan) 

Why introduce an Employee Share Scheme?

The main reason companies use Employee Share Schemes is to recruit and retain employees. But as much as you may want to give your team a slice of the action, if new shares have to be issued this can lead to individual shareholder value being diluted. The good news for all shareholders is that research has shown that Employee Share Schemes are a practical way for companies of all sizes to achieve a number of highly valuable benefits which increase overall business value.

Some companies, particularly those in their early years, have limited cash and so it can be attractive for young companies to be able to supplement salaries with shares. Many companies design their share ownership arrangements in ways that head off competitors, even those who can offer more cash and encourage those employees to stay longer once they’ve joined. The UK Government encourages employee share ownership and one key way in which it does this is through tax breaks for Employee Share Schemes which help save money for employers and employees.



Reward and motivate your team


Increase productivity and growth


Enjoy significant tax breaks


Recruit and retain top talent


Reduce employment costs and relieve cashflow


Facilitate succession planning

Which Employee Share Scheme?

Employee Share Schemes can work for businesses of all sizes across all sectors. Your choice of share scheme will largely depend on how your employees will acquire shares. Whether you want an Employee Share Scheme for some employees only or all your employees, there are three main ways in which an employee can acquire shares:

1. A gift of shares

The employee immediately becomes a shareholder, with all the benefits, as a result of receiving gifted shares, free of charge. In most cases, they will have to pay tax on the value of the gift because it will be subject to income tax. There are, however, a couple of schemes that don’t involve a tax bill.

2. Employee share purchase

The most direct route where employees purchase shares and immediately benefit from dividends and any increase in share value. However, this is uncommon mainly because employees tend not to have funds available and companies often don’t want the hassle of buying shares back if employees leave.

3. Share options

The employee has the right to buy shares in the future at a predetermined fixed price. There is little risk for the employee and any tax liability is deferred. If the price increases, the employee exercises the option; if it decreases, the employee can decide not to exercise the option.

The shares used in any of the above options may come from existing owners either selling their shares or agreeing to make their shares available for an ‘option’, or as a result of the company issuing new shares subject to shareholder agreement at the time or at a later date.

Tax efficient Share Schemes

There are currently four HMRC-approved tax advantaged share schemes which you could consider:

How we can help

Choosing and implementing an Employee Share Scheme takes a lot of planning. We can guide you through the entire process, so you get the right scheme in place for your business and employees.

Contact us now for a fully-funded options appraisal

Our fully funded Options Appraisal will explore how an Employee Share Schemes can work for your company.

Case Studies