Tax-advantaged share plans | End of covid easements
Published on 4th May 2022
HMRC has recently confirmed the end of the temporary easements that were introduced for tax-advantaged plans during the coronavirus pandemic.
To qualify for enterprise management incentive (EMI) options, option holders are required to meet a working time requirement. Covid-19 prevented some employees from being able to meet this requirement, and HMRC introduced time-limited changes to the legislation.
These temporary measures have now come to an end. HMRC has confirmed that from 6 April 2022, all employees participating in an EMI plan must meet the working-time requirement (of at least 25 hours per week or, if less, at least 75% of their working time). If, for any reason, the working-time requirements are not met on or after 6 April 2022 then neither existing, or new EMI options granted will be qualifying options.
For all-employee Save As You Earn (SAYE) Plans, HMRC introduced a temporary easement which allowed employees who were furloughed or on unpaid leave due to Covid-19 to pause saving for an unlimited period. This has also come to an end and will no longer apply for new savings contracts entered into from 6 April 2022.
Although the temporary Covid-19 easement will no longer be available, SAYE participants will still be able to use the easement that permits postponement of savings for a cumulative total of 12 months for any reason.
More widely, HMRC has also confirmed the end of certain other temporary employee tax Covid-19 easements – for example, some specific measures introduced in relation to cycle to work schemes.
Please get in touch with your usual Osborne Clarke contact or one of the experts below if you have any queries or would like to discuss further.
