There are now more than 16,000 share schemes registered in the UK, almost 1,000 more than in 2021, according to figures HMRCas listed firms turn to tax-advantaged schemes to incentivize employees as an alternative to cash bonuses and wage increases.
The schemes allow employees to take a share in their employer’s share capital and sell at lower rates income tax and capital gains.
Lynette Jacobs, share and incentive plans partner at Pinsent Masons, said: “More and more businesses are recognizing the significant benefits of tax-deductible share schemes as an effective employee engagement tool.
“Rising wage inflation and interest rates could lead to more companies introducing tax-advantaged employee share schemes as a form of reward – allowing them to save money by offering equity instead of a pay rise.”
It remains to be seen whether the schemes will be effective in retaining key staff, Jacobs added, as share prices could fall amid continued economic uncertainty. The Nasdaq-100 index of leading American technology companies has already fallen by 27% since the beginning of the year.
It comes as US investment app Robinhood has laid off almost a quarter of its staff after the value of assets owned by the company plunged 31% in the three months to June, when nearly two million users stopped trading on the app.
Robinhood boss Vlad Tenev wrote on his blog: “We are witnessing a further worsening of the macro environment with inflation at a 40-year high accompanied by a widespread crypto market crash.
“In these new circumstances, we are operating with more personnel than we should.”
Employee share schemes hit record highs despite subdued retail sentiment
Source link Employee share schemes hit record highs despite subdued retail sentiment