Employee Shareholder Status
an apprenticeship, the National Minimum Wage (an under 19 rate was introduced from October 2010) • removed the option to pay the development rate of the NMW to those in receipt of accredited training in their first six months of employment • removed the upper and lower age limits in respect of statutory redundancy pay and the tapering of entitlement post age 64. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS These regulations have now been subsumed into the Equality Act 2010. EMPLOYEE SHAREHOLDER STATUS Introduced in 2013 to increase employees’ involvement in the performance of their business, employee shareholders have different employment rights to other employees. The employer offers at least £2,000 (there is no upper limit) worth of shares in their company to those who agree to be an employee shareholder. There is no Income Tax or National Insurance contribution on the first £2,000 worth of employee shareholder shares unless the person already has 25 per cent or more voting rights in the company when they are excluded from this relief. As a result of accepting employee shareholder status the individual gives up certain employment rights: • unfair dismissal rights (apart from the automatically unfair reasons, where dismissal is based on discriminatory grounds and in relation to health and safety) • rights to statutory redundancy pay • the statutory right to request flexible working except in the 2 week period after a return from parental leave • the statutory right to request time off to train. In the Autumn Statement of 2016 the Government decided to end all tax benefits of an ESS scheme with effect from 1st December 2016, though 2nd December 2016 will apply where relevant independent financial advice was given before the statement. The taxable benefits associated with ESS were abolished completely in finance Act 2017. ENTERPRISE MANAGEMENT INCENTIVE A company that has assets of no more than £30M can offer Enterprise Management Incentives. Employees are given an option to buy shares worth up to £250,000 (£120,000 up to 16th June 2012) without having to pay Income Tax or National Insurance contributions on the difference between what they pay for the shares when they exercise their option and what they are worth at that point. Capital Gains Tax may still be due when the shares are sold. EQUAL PAY Article 141 (formerly Article 119) of the Treaty of Rome requires each European Union (EU) member state to maintain and apply the principle that men and women should receive equal pay for like (equal value) work. The Equal Pay Act 1970 came into effect on 29th December 1975. Equal value principles may be applied to completely different types of employment. Assessment follows a comparability study. A subsequent amendment to the Act has established a principle No printing, copying or reproduction permitted.
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