The UK also has tax advantaged share schemes which are approved by HMRC for qualifying companies/employees. Where a company is a standalone company with UK employees, that company must have a permanent establishment, however, where the issuing company is the holding company of a group, it is sufficient that one of the group companies has a permanent establishment in the UK. The Enterprise Management Incentive scheme is both the most tax advantageous and most popular, particularly for high growth companies. The scheme operates such that options can be awarded with an exercise price equal to the Actual Market Value at the date of grant with no income tax on exercise, resulting in the full increase in value between that and the value of the shares at the date of eventual sale being subject to Capital Gains Tax only at a maximum rate of 20% (based on current rates). Similarly to EIS, there are qualifying requirements for the scheme for both the company and the employee recipient of the options. An alternative scheme is the Company Share Option Plan. This is also an HMRC approved share option scheme with qualifying requirements; however, the rules differ slightly to EMI and can be a useful alternative. Our team handles valuations and HMRC agreement for the creation of such schemes, as well as ad hoc advisory relating to alternative incentive schemes such as Long-Term Incentive Plans, growth shares and unapproved options. We can also advise on existing schemes and frequently provide support on employee incentive schemes as part of due diligence proceedings.

Our Entrepreneurial tax team advise (working with our wider tax team) on aspects relating to proposed restructuring and M&A activity where UK tax implications arise. This includes UK migration and immigration of companies, obtaining HMRC tax clearances relating to the insertion of new holding companies and general tax advisory on M&A activity for UK entities.

One of the most generous corporation tax reliefs currently available, R&D tax relief is designed to encourage innovation and increase spending on R&D activities. UK based companies can make a claim for relief, resulting in a reduction in corporation tax payable or a cash repayment based on the amount spent on qualifying research and development. Our team specialise in assessing and maximising relief and preparing/submitting detailed claims for HMRC.