§ Mr. David ShawTo ask the Chancellor of the Exchequer what assessment the Inland Revenue has made of the percentage of option holders who cash in their options or shares as soon as possible; and if he will publish the assumptions made and the basis of calculation. [37963]
§ Mr. JackTwo independent surveys indicate that up to 90 per cent. of option holders sell all or most of their shares on exercise.
531W
§ Mr. David ShawTo ask the Chancellor of the Exchequer what information he has from internal or external sources of the average income of all employees granted share options under approved discretionary share options schemes in each of the last three years. [37902]
§ Mr. JackA provisional estimate of the average relevant emoluments of those granted share options under approved discretionary share option schemes in 1994–95 is approximately £45,000. Estimates for the earlier years are not readily available.
§ Mr. David ShawTo ask the Chancellor of the Exchequer (1) if he will publish the results of all research conducted by the Treasury or Inland Revenue since 1984 on the use of share option schemes by small and medium-sized enterprises; [37960]
(2) if he will publish the results of all research conducted by the Treasury or Inland Revenue since 1984 on the use of share option schemes for the benefit of low and middle income employees; [37961]
(3) if he will publish the results of all research carried on by the Treasury or the Inland Revenue since 1984 on the tax revenue gains resulting from increased payment of corporation tax and other taxes in companies whose shares increased in value and which operated successful approved discretionary share option schemes; and if he will publish the research. [37962]
§ Mr. JackA report by KPMG Management Consulting on employee share schemes, prepared for the Inland Revenue, Treasury and Department of Employment, was published by the Inland Revenue in 1991. This report addressed a wide range of issues, including an analysis of employee share schemes by company size. It did not consider the income of employees or any possible impact on corporation tax receipts. In addition regular monitoring is published in "Inland Revenue Statistics".
§ Mr. David ShawTo ask the Chancellor of the Exchequer how much corporation tax was paid in the last three tax years; and what proportion of the total corporation tax paid was by companies operating approved discretionary share option schemes. [37882]
§ Mr. JackThe figures for corporation tax receipts are as follows:
Year Corporation tax £ million 1992–93 15,783 1993–94 14,887 1994–95 19,390 Estimates of the proportion of total corporation tax paid by companies operating approved discretionary share option schemes are not available.
§ Mr. David ShawTo ask the Chancellor of the Exchequer how many companies started(a) save-as-you-earn share option schemes and (b) profit sharing schemes in each of the last three tax years and the current year to date. [37901]
532W
§ Mr. JackAvailable information is given in the table.
Year Profit-sharing schemes Savings-related share option schemes 1992–93 61 95 1993–94 35 104 1994–95 47 144 1995–961 17 77 1 Year to date.
§ Mr. David ShawTo ask the Chancellor of the Exchequer what assessment the Inland Revenue has made of the value of revenue savings to be made by the proposed changes in taxation of share options; and if he will publish the assumptions made and the basis of the calculation. [37964]
§ Mr. JackThere will be no effect on tax receipts for the next three financial years and the full-year level will not be reached until approximately 2002–03 as a result of transitional arrangements for options granted before 17 July 1995. A provisional estimate of the full-year revenue yield is about £80 million each year based on current levels of exercise, size of gains and the 1995–96 income tax and capital gains tax systems.
An outline of the methodology and underlying assumptions for the estimated cost of tax relief for approved discretionary share option schemes was published in chapter 6 of "Inland Revenue Statistics 1991." It has been assumed that the bulk of schemes will continue after the tax relief is withdrawn, and that the gains made on the exercise of options will generate income tax.
§ Mr. David ShawTo ask the Chancellor of the Exchequer (1) what percentage of companies which floated on the Stock Exchange during the last year had approved discretionary share option schemes in operation; [37879]
(2) how many United Kingdom subsidiaries of United States parent companies operate approved discretionary share option schemes involving options being granted over shares in the United States parent companies; [37900]
(3) how many of the 100 largest corporation tax paying United Kingdom—registered companies in the last year operated share option schemes; [37885]
(4) what assessment he has made of the relationship between changes in the value of share options normally and over the longer term and the profitability of companies; [37972]
(5) how many of the companies which have set up approved discretionary share options schemes since 1984 (a) had turnover below £50 million, (b) has pre-tax profits below £10 million and (c) did not have occupational pension schemes in the year the option schemes were approved by the Inland Revenue. [37903]
§ Mr. JackThis information in the form requested can be provided only at disproportionate cost. However, discretionary share option schemes have been monitored since the scheme began in 1984 and statistics published each year in "Inland Revenue Statistics", copies of which are in the Library.