An employee share scheme is a common method of providing employees with an incentive to help improve a business and its performance.

This scheme allows employees to save between £5 and £250 per month for three, five or seven years. Employees get a tax-free bonus if they complete the savings plan.

Employers grant employees an option. At the end of the period, employees choose either to:

• Use the money saved, plus the bonus and interest, to buy shares in your business; or
• Have their contributions returned.

Neither the bonus nor any gains made on the shares are subject to income tax or NICs. Capital Gains Tax may be payable on sale or disposal of the shares. Employers have different terms and conditions for their schemes. However, you must offer every eligible employee the chance to participate.

For further information please contact the Cobia team on 0845 226 0580 or email info@cobia-uk.com