UK: COVID-19 - HMRC issues further Share Plan Guidance

Tapestry Newsletters

12 March 2021

HMRC’s latest Employment Related Securities bulletin has been published and can be found here. It is the latest in a series of bulletins providing updates and further guidance on HMRC’s proposals for managing the impact of COVID-19 on share plans.

Sharesave / SAYE (Save as You Earn)

In HMRC’s June 2020 bulletin (which we alerted you on here), HMRC announced an extension of the 12-month payment holiday period for SAYE participants placed on furlough or unpaid leave during the coronavirus pandemic. HMRC then updated the savings prospectus to reflect this payment holiday extension.

In this latest bulletin, HMRC confirms that the payment holiday extension announed in June 2020 still applies and is subject to ongoing review.
EMI (Enterprise Management Incentive) Plans

In HMRC’s July bulletin (which we alerted you on here), HMRC confirmed that participants in EMI plans who have been unable to meet the EMI “working time requirement” of at least 25 hours per week (or if less, at least 75% of their working time) as a result of the pandemic will still be able to retain the benefits of these tax efficient options.

Legislative changes were made to support this approach when the Finance Act 2020 modified existing legislation to ensure affected participants with existing EMI options could retain the tax benefits. It was recently announced in the 2021 Budget that, under the Finance Bill 2021, the same treatment will now extend to new EMI grants.

These modifications to EMI plans are due to end on 5 April 2022.

Another announcement at the 2021 Budget was a review of the EMI rules, and the government has launched a consultation on whether and how to expand EMI to ensure it offers effective support for high-growth companies seeking to recruit and retain key employees. HMRC’s latest bulletin repeats the call for evidence and views on whether and how the EMI should be expanded to include more companies.

Responses to the consultation should be sent to HMRC by 26 May 2021.

HMRC contact

HMRC continues to recommend that enquiries are submitted by email ( rather than post, due to potential postal delays. However, they confirmed that postal enquiries can still be received. 

Tapestry comment 

As the effects of the pandemic continue to draw out, the continuing extension of the 12-month payment holiday period for affected Sharesave participants is welcome news. As we noted in previous bulletins, your Sharesave plan terms should be checked to see whether and how the new payment holiday rules can operate in practice, and employee facing guidance will need to be updated too. 

The additional legislative changes for new EMI options is also welcome news for those with new EMI options - it will be a relief to affected participants who might otherwise have lost out on potentially substantial tax savings available under EMI. This update together with the government’s new consultation shows that they are continuing to support EMI plans.

If we can help with this, or if you have any questions about this alert, please do contact us.

Chris Fallon and Sonia Taylor

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