Local companies could be
missing out on a tax efficient way to reward and retain key
employees, warn a leading firm of chartered accountants.
Incentives - or EMIs - are a flexible share option scheme
introduced last summer with small and medium-sized companies in
Most trading companies
with gross assets of below £15m can now establish EMIs for all
key members of staff - and receive tax relief on the cost of
setting up the scheme.
EMIs give participating
employees the option to buy shares in the company - options
which can be exercised three to ten years ahead. Directors can
also be granted options.
Raftery partner John
take advantage of the scheme could find it helps both recruit
and retain high-calibre employees.
"It may also
motivate employees to contribute further to the success of a
company in which they have a financial stake and it enables
employers to effectively remunerate key staff in a highly tax
The schemes are open to
those with less than a 30 per cent share holding in the company.
The price of shares is set at the time the option is granted
with no obligation for the employee to exercise the right.
If the share value falls
they therefore need not buy - if it rises they have made a
profit which attracts tax advantages.
such as Raftery & Co can work with companies to set up
Enterprise Management Incentive schemes which can be adapted to
meet the needs of individual employees.