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Welcome to our monthly tax newsletter designed to keep you informed of the latest tax issues. We hope you enjoy reading the newsletter; remember, we are here to help you so please contact us if you need further information. CONSIDERING GIVING SHARES IN YOUR COMPANY TO EMPLOYEES? More and more companies now give their employees the opportunity to acquire company shares. If correctly structured, this can be a very tax efficient way of attracting and retaining staff, as they are able to share in the success of the company. However, if you get things wrong there can be significant tax charges on the employee and employer. As a general rule, if employees are allowed to acquire shares at less than market value, the discount is taxable as employment income and PAYE; national insurance may also be due. So for example, where the employee pays just £1 for a share worth £10, the £9 difference would be taxable. The issue of shares to an employee also needs to be reported to HMRC using Form 42 by 6 July following the end of the tax year. There are a number of schemes that you may wish to consider where the receipt of the shares will not be taxed as employment income and in some cases will only be subject to capital gains tax when the shares are eventually sold. It used to be possible to ask HMRC for confirmation that the share scheme satisfied the rigid rules for the tax advantages to apply, but this is no longer possible and employers are now required to “self-certify” that the share scheme complies with the legislation. We can assist you with this process if you would like to consider putting a share scheme in place. lPlease contact a member of our Tax Team if you would like to discuss any of the issues raised in this newsletter. You can find our details through www.broadbentsltd.co.uk (Please register) or phone us on 01422 347 880.