Employment Related Securities Bulletin 45 (September 2022)
Find out about the announced changes to the Company Share Option Plan (CSOP) scheme and an update on the Save As You Earn (SAYE) bonus rate mechanism review.
Government announcement on the Company Share Option Plan scheme
The Government has today announced two changes to the Company Share Option Plan (CSOP) scheme taking effect from 6 April 2023.
Increase to the employee option limit
There is currently a maximum employee share option limit based on market value at grant of £30,000. The Government has announced that this will be increased to £60,000 for any new options granted from 6 April 2023. Existing options are unaffected by this change.
Changes to the share class requirement rules
There is currently a requirement that any shares used in the Company Share Option Plan scheme must be in a share class that is ‘worth having’, by either:
- being ‘open market shares’ majority-held by outside investors
- giving employees control of the company
The Government has announced that this rule will be removed for share options granted under a Company Share Option Plan scheme from 6 April 2023. This change will more closely align the scheme with the similar rules in Enterprise Management Incentive (EMI).
Next Steps
Legislation will be introduced in a future Finance Bill to support the changes. We will provide further guidance on the changes before the changes come into effect.
SAYE bonus rate mechanism review
In June 2022, ERS Bulletin 43 informed of HMRC’s intention to conduct a review of the SAYE bonus rate mechanism. Whilst undertaking the review, the bonus and interest rates on SAYE contracts have been paused at 0%.
We have been considering options to simplify the mechanism. We will engage with industry experts to understand their views on the options and will provide a further update once we have held these discussions.