Share Option Taxation

HC Deb 13 February 2002 vol 380 cc374-5W

Mr. Hoban

To ask the Chancellor of the Exchequer if he will list the changes made to the taxation of share options since 1 May 1997. [32927]

Dawn Primarolo

[holding answer 4 February 2002]: Employee share schemes are at the centre of the Government's productivity and enterprise agenda. Since 1 May 1997 we have made the following changes to encourage greater use of share schemes and to ensure flexibility and fairness in the tax treatment of employee share options.

Finance Act 1998: extension of the definition of "long options" from seven to 10 years.

6 April 1999: alignment of national insurance treatment of share options with the PAYE rules. The Social Security Act 1998 introduced an amendment to the Social Security Contributions and Benefits Act 1992.

Finance Act 2000: introduction of Enterprise Management Incentives to help small companies recruit and retain the staff they need to grow.

28 July 2000: introduction of a concession to allow employers to agree with their employee option holders that the latter would bear the whole or part of the employer's national insurance charge on exercise of their options. The Child Support, Pensions and Social Security Act 2000.

Finance Act 2001: improvements to the Enterprise Management Incentives.

From 11 May 2001: a further concession to allow companies which had granted options between April 1999 and May 2000 to cap their NIC liabilities. The Social Security Contributions (Share Options) Act 2001.

1 January 2002: Statutory Instrument 3799/2001 doubled the gross asset test for companies to qualify for Enterprise Management Incentives from £15 million to £30 million.