BIM44015 - Specific deductions - employee share schemes: Summary of tax and NICs treatment
This table summarises the key features of the different kinds of approved and unapproved schemes, and the tax and NICs treatment for employers and employees.
Scheme |
SIP |
EMI |
CSOP |
SAYE |
APS |
Unapproved |
Options or awards? |
Awards |
Options |
Options |
Options |
Awards |
Options or awards |
Must a trust be used? |
Yes |
Not essential |
Not essential |
Not essential |
Yes |
Not essential |
Can a QUEST trust be used to provide scheme shares to employees? |
No |
No |
No |
Yes |
No |
Not with share option schemes. Only if share awards to all employees on similar terms |
Income tax advantages for employees? |
Yes |
Yes |
Yes |
Yes |
Yes - for shares allocated before 1/1/2003 |
No |
NICs advantages for employees and employers? |
Yes |
Yes |
Yes |
Yes |
Yes |
No |
Statutory tax deductions for employers’ setting up costs? |
Yes (ICTA88/SCH4AA) |
No - general Sch D principles apply |
Yes (ICTA88/ S84A) |
Yes (ICTA88/S84A) |
Yes (ICTA88/ S84A) |
No - general Sch D principles apply |
Periods starting before 1/1/2003 - statutory deductions for employers’ contributions to trusts? |
Yes (ICTA88/SCH4AA) |
No - general Sch D principles apply |
No - general Sch D principles apply |
Yes - if a QUEST is used (FA89/ S67) |
Yes - for sums paid before 6/4/02 (ICTA88/ S85) |
Only if a QUEST is used - otherwise general Sch D principles apply |
Periods starting on or after 1/1/2003 - statutory deductions for employers’ contributions to trusts? |
Yes (ICTA88/SCH4AA) |
Yes (FA03/SCH23) |
Yes (FA03/ SCH23) |
Yes (FA03/ SCH23) |
Yes (FA03/ SCH23) |
Only if “qualifying shares” under FA03/SCH23 - otherwise general Sch D principles apply (including FA03/SCH24) |
