The government has launched a consultation on non-discretionary tax-advantaged employee share schemes, including sharesave schemes and share incentive plans (Sips) as part of its aim to improve and increase their usage.
The government is interested in hearing from stakeholders about whether the schemes are attractive to lower income earners in order to ensure this group is able to take advantage of these. It wants to gather feedback on scheme participation and find out how these can be improved and simplified for both employers and staff, so they can be used as a tool to drive economic growth.
The consultation has been launched alongside HM Revenue and Custom’s (HMRC) Share schemes evaluation report, which revealed that 81% of respondents said the schemes help boost their business and three-quarters said they helped retain and recruit staff.
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Almost one-third (31%) that are unaware of the schemes said they are too complicated to set up, while 50% that have set up a scheme did so to create a feeling of ownership among their staff. Other common reasons for cited for setting up a scheme included the ability to retain and attract skilled employees, and improve to staff morale.
Earlier this year, the government announced reforms to the company share option plan, which saw a doubling of the amount of share options employees can be granted and the removal of restrictions on which kind of shares could be included. The government is now looking to replicate the success of this through similar reforms for Sips and sharesave schemes.
Victoria Atkins, financial secretary to the Treasury, said: “Employee share schemes are an effective way to boost motivation in workforces by giving people an extra stake in what they do, and they offer a boost for business. Growing the economy is a priority for this government and one way to make this happen is by making these schemes as easy as possible to set up.”
The consultation will be open for responses until 25 August 2023.