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COVID-19: UK Employee Share Schemes

Employee retention is a high priority for businesses grappling with the profound impact of the coronavirus disease 2019 (COVID-19). Employee share schemes remain a versatile and valuable way to retain important employees.

However, many may not have considered the unexpectedly adverse tax consequences that some of the UK government’s business support measures (including, for example, the Coronavirus Job Retention Scheme (CJRS)) could have on employee share schemes.

Two areas of particular concern are:

  1. The employee ‘commitment of working time’ requirement for Enterprise Management Incentive (EMI) options, and

  2. Existing scheme provisions dealing with employees who leave the business or are made redundant

In both cases, a failure to carefully consider, and then navigate, the complexities of both scheme rules and tax law, before making or communicating decisions, could lead to a loss of valuable tax advantages.

Our helpful note provides more detail on the issues to be aware of and and sets out some practical steps for businesses to mitigate the risks.

© Copyright 2020 Squire Patton Boggs (US) LLP

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About this Author

Clifford Sims, Squire Patton Boggs, Pension Fund Investment Lawyer, UK
Partner

Clifford is a partner in our London office and heads our Pension Fund Investment Group. He is recognised by Chambers UK as a leading individual for pensions and “an expert in investment and financial services in relation to occupational pensions” who is "extremely well organised, very commercial" and “is someone who is able to combine good technical knowledge with communications skills”.

The Legal 500 UK commented he is “more commercial than the average pensions lawyer” and “deeply knowledgeable”. He advises trustees, local authorities, product...

44 20 7655 1193
Caroline Noblet, Squire patton Boggs, employment matter lawyer, multijurisdictional litigation attorney, London
Partner

Caroline Noblet co-leads our Labor & Employment Practice Group and is based in our London office. Caroline has approximately 25 years of experience as an employment lawyer, advising a broad range of businesses including FTSE 100 and 250 companies. She is responsible for some of the firm’s key global accounts, as she co-ordinates and advises in relation to all matters of employment law, on multijurisdictional and local issues. She is passionate about the benefit a “one-stop” shop service can bring to clients, in terms of the effective and efficiency of legal services delivery.

44 20 7655 1473