TaxPersonal TaxIFS predicts tax breaks on share options

IFS predicts tax breaks on share options

The Institute of Fiscal Studies is expecting chancellor Gordon Brown to unveil larger tax breaks for share options in small, high-risk companies in his Budget on 7 March.

The institute believes the chancellor will extend the scope of the enterprise management incentives, designed to give tax relief on share options worth up to Pounds 100,000 per employee, in order to help growing companies hold on to important staff, the Financial Times reported today.

The scheme, introduced last autumn, is currently limited to 15 employees per company.

However, in the pre-Budget report, the chancellor proposed to extend it to all employees up to a ceiling of Pounds 2.5m of a company’s shares – Pounds 1m higher than the original limit.

EMI applies to companies in high-value areas of manufacturing, services and e-commerce with gross assets of up to Pounds 15m. So far 450 companies have taken advantage of the scheme.

The IFS also suggested the chancellor would have approximately Pounds 2bn to spend on tax cuts after accounting for a Pounds 1.75bn package of transport tax cuts put out for consultation in last November’s pre-Budget report, less than the Pounds 3bn to 4bn some other organisations have predicted.

Links

AccountancyAge.com’s Budget 2001

IFS online

Inland Revenue page on Enterprise Management Incentives

Analysis – The share scheme ifs, buts and maybes

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

19h Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter