Employee shareholders

So employees will be able to enter into an agreement with their (corporate) employers to give up certain employment rights in exchange for a free issue of shares with a market value of £2,000 (see S.27 growth and Infrastructure Bill).

So how do they get valued? What happens if some smart arse later established that the value was incorrect and they were only worth £1,999? Agreement nul and void? Employee gets their rights back?

What about the tax consequences?

The employee is receiving money's worth taxable under S.62 and there's no exemption, but presumably the company gets a CT deduction.

Assuming the shares are an RCA, am I right in thinking that there's no PAYE or NI and it's just reported on from 42 and the employee's own Tax Return.

What happens if HMRC then dispute the valuation?

Is it possible to agree valuations with HMRC up front?

Comments
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To answer the last question first ...

BKD |
BKD's picture

.

blok |
blok's picture

Thanks

George Attazder |
George Attazder's picture

Depends, George

BKD |
BKD's picture

Hmmm

George Attazder |
George Attazder's picture