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Firms Urge Tax Relief for Employee Shares
25 Nov
Summary
- Companies want tax incentive holding period cut from five to two years.
- Reducing the period could boost employee participation significantly.
- This change aims to foster a culture of investment in the UK.
Major corporations are lobbying for a reduction in the mandatory holding period for employee share incentive plans (SIPs) from five years to two. Companies like Vodafone and Diageo argue that this change, to be considered in the upcoming Autumn Budget, would significantly increase employee participation in ownership schemes. The current five-year requirement for tax benefits, such as exemption from income tax and National Insurance, is seen as a barrier.
More than 50 firms have collectively called for this reform, emphasizing its potential to foster a stronger culture of investment across the UK. This aligns with the government's broader economic strategy to encourage savings and investment among the public. ProShare, a lobby group, highlighted that simplifying SIPs would help ordinary workers gain a stake in their companies, thus boosting financial inclusion and national economic vitality.
This initiative seeks to provide British businesses with a more effective tool for attracting and retaining skilled employees. By lowering the holding period, more people could become investors, leading to a workforce more closely aligned with their employers' success and a stronger, more invested national economy.
