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Covid-19: Your questions answered
For a free consultation call: 0114 251 8850 or email: email@example.com
“I was very impressed with the professional support I received from Hart Shaw throughout. They dealt with HMRC on my behalf, gathering all the information required and went through every aspect of the tax investigation process with me. I had complete trust in them.”
Mr D, Director, South Yorkshire
“Steve Vickers assisted me on a difficult case concerning EBTs. He was an excellent expert witness who was able to withstand leading tax counsel instructed by the other side in the end he brokered a sensible compromise which avoided expense for both parties.”
Mrs Cowell, Partner, North West
There are a number of approved schemes such as the Enterprise Management Incentive Scheme and the Company Share Option Plan. Unapproved schemes are also common.
If shares are acquired through one of these schemes and the option price is set below market value then the employee will be taxed as employment income on the discount between the option price and the market value at the date the option is granted.
If an unapproved scheme is put in place the employee will also be taxed on the full amount of any discount but by reference to the value at the date the shares are acquired.
Many of our clients are small or medium sized companies. They have no “market” they can refer to for a valuation of their shares. They are not quoted, so how much are the shares worth? The answer is not simple and can only be determined by carrying out a detailed valuation exercise.
The problem arises where the scheme is implemented without seeking HM Revenue’s agreement to the valuation in advance:
Either way the anticipated benefits of having the scheme can be significantly eroded by these unexpected tax charges.
Ask HM Revenue and Customs to agree the valuation in advance
We can negotiate with HMRC in advance and obtain their agreement to the valuation so that the option price can be correctly set. Their agreement is valid for 60 days, which gives ample time to finalise the documentation and implement the scheme.
We know what HMRC expect to see in a valuation report. We can pre-empt their queries and reduce the time it takes to reach agreement; thereby saving costs.
We understand your objectives and get the best result possible for you.
If you are rewarding employees with shares, think twice before “saving money” and not looking at the valuation. If the share, or option price, is set incorrectly it can be very expensive. Now more than ever, no one wants unnecessary and unplanned costs.
Contact Steve Vickers on 0114 251 8850 or email him firstname.lastname@example.org to discuss our Valuation Services.
Hart Shaw LLP are currently applying COVID-19 working protocols and our staff are working from home. Our switchboard will be answering calls but you can contact our partners on the following numbers:
Further contact details can be found here: https://www.hartshaw.co.uk/about-us/key-contacts
We apologise if this is inconvenient but we are doing our best to follow government working directions whilst continuing to service our clients to the best of our ability in these difficult times for all and appreciate your patience.