The government has failed to deliver dot.com companies the national insurance cuts they had hoped would reduce the multimillion pound bills they face for offering employees share options. Last month Robert Dighero, finance director of internet auction site QXL, accused the Treasury of ‘stabbing internet companies in the back’ after the online auctioneer revealed it would have to pay up to #14.8m extra in national insurance on employer share options. But the Inland Revenue said on Tuesday it would only ‘consider’ legislation to give employers more certainty about their exposure to future national insurance liabilities when issuing share options. It failed to say when it would legislate or what form that legislation would take. The Revenue did promise to consider a range of options including allowing all or part of employers’ NICs on unapproved share options to be met by employees. It admitted the ‘suggestions would give employers, particularly those with high growth potential, much more certainty about their exposure to NICs liability’. And it added: ‘The government is attracted to improving flexibility in this area for business and is considering legislation.’ But KPMG head of share schemes David Tuch said: ‘We are disappointed that it is still not clear what the government is going to do to address this issue.’ And Tuch urged the government to ensure any changes introduced apply to all companies and not just internet start-ups and similar hi-tech companies. Calling on ministers to abolish employers’ NICs on unapproved options, Tuch said as a minimum, the government should either cap gains at #50,000 on options exercised in any one year or allow employers to recharge NICs to individuals.
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