On 24 June 2021 the UK published the 2019/2020 statistics on employee share schemes.

Employee Share Schemes (ESS) are available to companies that want to award shares directly to their employees or to grant them options to buy shares.

There are four share schemes available that have tax advantages for both employers and employees. Save As You Earn (SAYE) and Share Incentive Plans (SIP) are available to all employees of a company. The other two schemes, Company Share Options Plans (CSOP) and Enterprise Management Incentives (EMI) can be made available to certain employees at the discretion of the employer.

Around GBP 530 million was given to employees in income tax relief and GBP 340 million in national insurance contributions (NIC) relief in 2019/2020 from the tax-advantaged employee share schemes. The largest contributor to the cost of this total tax relief was the EMI. Options granted under SAYE scheme have the largest aggregate value, probably because the scheme is available to all employees.

Income Tax and NIC relief

In 2019/2020 the cost of tax relief on CSOP options increased by 43% while the cost of the other schemes has remained around the same as the previous year. It should be noted however that the total tax relief given on CSOP options remains much lower than for the other schemes, amounting to GBP 50 million.

The share schemes available to all employees (SIP and SAYE) give a larger total tax relief than the total of the two discretionary schemes (EMI and CSOP).

Relievable gains

The EMI has the largest total relievable gain and the largest average relievable gain per employee. The access of employees to EMI schemes is restricted and consequently fewer employees use them than other schemes, however the maximum value of options that can be granted is GBP 250,000 per employee. The gain per employee can therefore be much greater than for the other schemes in which lower limits are applicable.

Number of companies operating schemes

A total of 15,340 companies operated employee share schemes in the UK in 2019/20, an increase of 6% from the previous year. The EMI accounted for most of the increase. This may due to the ability of the EMI scheme, as noted above, to offer total share options up to a value of GBP 250,000 in a three-year period, an amount that is higher than for the other employee share schemes. The EMI is therefore a popular way of remunerating employees in eligible companies.

The number of companies operating the other three employee share schemes has decreased by 3% from the previous year.

Combination of schemes

Companies may operate more than one type of employee share scheme, however most companies only operate one type of scheme. In 2019/2020, 99% of the companies operating the EMI did not use any other tax advantaged employee share scheme. A much lower number of companies operate two or three schemes at the same time, and fewer than ten companies in the UK are running all four employee share schemes.