The Chancellor of the Exchequer, George Osborne, has announced in today's budget an important development with regard to employee shareholders.
Part of the definition of 'employee shareholder' in the forthcoming new s205A Employment Rights Act 1996 requires that the employer must issue or allot shares to the employee which have a value of at least £2,000. Until now, the award of those shares was to be subject to income tax (so
a 20% taxpayer would have paid £400 income tax on their award of £2,000 shares).
The Chancellor has today announced that the first £2,000 of shares will be exempt from income tax and NICs, which means they are effectively free of tax for anybody receiving the minimum allotment - see para 1.133 of the Budget. He has also announced the precise implementation date for employee shareholder status will be 1 September 2013 (until last week, it was to be 6 April, but last week BIS announced it was being put back until the
To learn about employee shareholder status, as well as the other changes to employment law coming soon (including Acas Early Conciliation, Protected Settlement Conversations and the Underhill procedural reforms), see Daniel Barnett's Employment Law MasterClass which is taking place soon in Bristol, Birmingham, Manchester and London.